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Author: Davoli, Maddalena
Resulting in 1 citation.
1. Davoli, Maddalena
Rodriguez-Planas, Nuria
Culture and Adult Financial Literacy: Evidence from the United States
Economics of Education Review published online (19 June 2020): 102013.
Also: https://www.sciencedirect.com/science/article/pii/S0272775719305217
Cohort(s): NLSY79, NLSY97
Publisher: Elsevier
Keyword(s): Family Background and Culture; Financial Literacy

Using a US nationally representative sample of over 6000 adults from 26 countries of ancestry, we find a strong association between their financial literacy in the US and the financial literacy level in their self-reported country of ancestry. More specifically, if an individual from a country of ancestry with 'average' financial literacy had instead come from a country with financial literacy one-standard deviation above the mean, his or her likelihood of answering correctly basic financial literacy questions regarding inflation, risk diversification, and interest rate in the US would have increased by 4 percentage points, a 9% increase relative to the average financial literacy in our sample of 43%. The cultural components behind this observed association include a strong emphasis on patience, long-term orientation and risk-aversion in the country of ancestry. We also find that the association is driven by financial literacy on risk diversification and interest compounding.
Bibliography Citation
Davoli, Maddalena and Nuria Rodriguez-Planas. "Culture and Adult Financial Literacy: Evidence from the United States." Economics of Education Review published online (19 June 2020): 102013.