Financial literacy around the world: insights from the S&P’s rating services global financial literacy survey
The Standard & Poor's Ratings Services Global Financial Literacy Survey is the world’s largest, most comprehensive global measurement of financial literacy. It probes knowledge of four basic financial concepts: risk diversification, inflation, numeracy, and interest compounding. The survey is based on interviews with more than 150,000 adults in over 140 countries. In 2014 McGraw Hill Financial worked with Gallup, Inc., the World Bank Development Research Group, and GFLEC on the S&P Global FinLit Survey.
The TIAA Institute-GFLEC Personal Finance Index (P-Fin Index)
The TIAA Institute-GFLEC Personal Finance Index (P-Fin Index) measures knowledge and understanding that enable sound financial decision making and effective management of personal finances among U.S. adults. The P-Fin Index is an annual survey developed by the TIAA Institute and the Global Financial Literacy Excellence Center, in consultation with Greenwald & Associates. It is unique in its breadth of questions and its coverage of the topics that measure financial literacy. The index is based on responses to 28 questions across eight functional areas: earning, consuming, saving, investing, borrowing/managing debt, insuring, comprehending risk, and go-to information sources.
Financial Well-being among Black and Hispanic Women
This paper provides an in-depth examination of the financial well-being of Black and Hispanic women and the factors contributing to it, using the 2018 wave of the National Financial Capability Study. Differences between Black and Hispanic women versus White women are documented, in that the former are more likely to face economic challenges that depress financial well-being. Controlling for differences in socio-demographic characteristics, there are important differences in the factors that contribute to financial well-being for Black and Hispanic women compared to White women. This includes distinct impacts of education, family structure, employment, and financial literacy. Results imply that extant financial education programs inadequately address the needs of Black and Hispanic women.
Fearless Woman: Financial Literacy and Stock Market Participation
Women are less financially literate than men. It is unclear whether this gap reflects a lack of knowledge or, rather, a lack of confidence. This survey experiment shows that women tend to disproportionately respond “do not know” to questions measuring financial knowledge, but when this response option is unavailable, they often choose the correct answer. The authors find that about one-third of the financial literacy gender gap can be explained by women’s lower confidence levels. Both financial knowledge and confidence explain stock market participation.
Attitudes Toward Debt and Debt Behavior
This paper introduces a novel survey measure of attitude toward debt. Survey results with panel data on Swedish household balance sheets from registry data are matched, showing that debt attitude measure helps explain individual variation in indebtedness as well as debt build-up and spending behavior in the period 2004–2007. As an explanatory variable, debt attitude compares well to a number of other determinants of debt, including education, risk-taking, and financial literacy. Evidence that suggests that debt attitude is passed down along family lines and has a cultural element is also presented.
Financial Literacy and Wellness Among U.S. Women: Insights on Underrepresented Minority Women
The 2020 TIAA Institute-GFLEC Personal Finance Index (P-Fin Index) survey was fielded in January 2020 and included an oversample of women. This enables examining the state of financial literacy and financial wellness among U.S. women immediately before the onset of COVID-19. A more refined understanding of financial literacy among women, including areas of strength and weakness and variations among subgroups, can inform initiatives to improve financial wellness, particularly as the United States moves forward from the pandemic and its economic consequences.
Millennials and money: Financial preparedness and money management practices before COVID-19
Millennials (individuals age 18–37 in 2018) are the largest, most highly educated, and most diverse generation in U.S. history This paper assesses the financial situation, money management practices, and financial literacy of millennials to understand how their financial behaviour has changed over the ten years following the Great Recession of 2008 and the situation they were in on the cusp of the current economic crisis (in 2018) due to the COVID-19 pandemic. Findings from the National Financial Capability Study (NFCS) show that millennials tend to rely heavily on debt, engage frequently in expensive short- and long-term money management, and display shockingly low levels of financial literacy. Moreover, student loan burden and expensive financial decision making increased significantly from 2009 to 2018 among young adults.
Financial literacy and financial resilience: Evidence from around the world
This study presents findings from a measurement of financial literacy using questions assessing basic knowledge of four fundamental concepts in financial decision making: knowledge of interest rates, interest compounding, inflation, and risk diversification. Worldwide, just one in three adults are financially literate—that is, they know at least three out of the four financial concepts. Women, poor adults, and lower educated respondents are more likely to suffer from gaps in financial knowledge.
