Wharton Pension Research Council Working Papers

Financial Literacy among the Young: Evidence and Implications for Consumer Policy

Annamaria Lusardi, Dartmouth College
Olivia S. Mitchell, The Wharton School, University of Pennsylvania
Vilsa Curto, Harvard University


We examined financial literacy among the young using data from the 1997 National Longitudinal Survey of Youth. We showed that financial literacy is low among the young; fewer than one-third of young adults possess basic knowledge of interest rates, inflation, and risk diversification. Financial literacy is strongly related to sociodemographic characteristics and family financial sophistication. Specifically, a college-educated male whose parents had stocks and retirement savings is about 50 percentage points more likely to know about risk diversification than a female with less than a high school education whose parents were not wealthy. These findings have implications for consumer policy.


Date Posted: 23 August 2019