TY  - RPRT
        AU  - Davoli, Maddalena
AU  - Rodríguez-Planas, Núria
        TI  - Culture and Adult Financial Literacy: Evidence from the United States
        PY  - 2020/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 13349
        UR  - https://www.iza.org/publications/dp13349
        AB  - Using a US nationally representative sample of over 6,000 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.
        KW  - economic decisions
KW  - culture
KW  - epidemiological approach
KW  - financial literacy
        ER  -