Financial Literacy and Retirement Planning in Switzerland
Journal
Numeracy
ISSN
1936-4660
Type
journal article
Date Issued
2013-07-01
Author(s)
Abstract
We use a representative survey covering 1,500 households to document the level of financial literacy in Switzerland and to examine how financial literacy is related to retirement planning. We measure financial literacy with standardized questions that capture knowledge about three basic financial concepts: Compound interest, inflation, and risk diversification. We measure retirement planning by the incidence of a voluntary retirement savings account. Our results show that financial literacy in Switzerland is high by international standards--a result which is compatible with the high ranking of Switzerland on the PISA mathematical scales. Financial literacy is lower among low-income, less-educated, and immigrant, non-native-speaking households as well as among women. We find that financial literacy is strongly correlated with voluntary retirement saving. Our results also show that financial literacy is correlated with financial market participation and mortgage borrowing.
Language
English
Keywords
financial literacy
retirement planning
financial market participaton
household debt
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Berkeley Electronic Press
Publisher place
Berkeley
Volume
6
Number
2
Start page
2
End page
23
Pages
22
Subject(s)
Eprints ID
224260
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Financial Literacy and Retirement Plannin in Switzerland.pdf
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