Wealth and the Acquisition of Financial Literacy

Personal Finance, Military Families February 06, 2017 Print Friendly and PDF

 

Monticone, C. (2010). How much does wealth matter in the acquisition of financial literacy? The Journal of Consumer Affairs, 44 (2), 403-422.

Brief Description: This article investigated the determinants of financial literacy in Italy using the 2006 wave of the Italian survey on household income and wealth. Empirical results indicated that wealth has a positive effect on financial literacy, suggesting that households endowed with larger financial assets are more likely to invest in financial knowledge.

Implications: an implication for policymakers is that active measures are needed to create a financially responsible workforce in Italy. Educational initiatives should be directed especially at the young - because due to recent pension reforms they have a greater need to build their own retirement wealth, and hence a greater need for an improved financial knowledge - and the poor - because they are less likely to acquire some knowledge by themselves. Greater information disclosure and transparency by financial institutions would also be desirable.

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This work is supported by the USDA National Institute of Food and Agriculture, New Technologies for Ag Extension project.