Economist, Federal Reserve Board
Emilia Bonaccorsi di Patti, World Bank
Robin Lumsdaine, American University
Joanne W. Hsu is an economist at the Board of Governors of the Federal Reserve System. Her research focuses on household financial decision making, including the role of financial sophistication and cognition. At the Board, she is part of the team responsible for administering and disseminating the Survey of Consumer Finances. Prior to joining the Board in August 2011, she completed her PhD in economics at the University of Michigan and was a Networks Financial Institute Dissertation Fellow in Financial Literacy. She is a member of the research team of the Cognitive Economics Project, a multidisciplinary study of older Americans that investigates how cognitive and subjective factors relate to decisions preparing for and sustaining well-being in retirement.
Women tend to be less financially literate than men, which is consistent with a division of labor in which husbands manage finances. However, women also tend to outlive their husbands. I find that older women acquire financial literacy as they approach widowhood — 80% would catch up with their husbands by the expected onset of widowhood, and these gains are not attributable to cognitive decline among men. The results are consistent with a model in which the division of labor collapses when a spouse dies: women have incentives to delay acquiring financial human capital, but also to begin learning before widowhood.