Financial Literacy Confidence and Retirement Planning: Evidence from China
Though ample empirical evidence demonstrates the relationship between objective financial literacy and retirement planning, we have a limited understanding of the role of individuals’ subjective financial literacy in their retirement planning. In this study, we examine how individuals’ financial lit...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2023-02-01
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| Series: | Risks |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2227-9091/11/2/46 |
| _version_ | 1797618349214007296 |
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| author | Bingzheng Chen Ze Chen |
| author_facet | Bingzheng Chen Ze Chen |
| author_sort | Bingzheng Chen |
| collection | DOAJ |
| description | Though ample empirical evidence demonstrates the relationship between objective financial literacy and retirement planning, we have a limited understanding of the role of individuals’ subjective financial literacy in their retirement planning. In this study, we examine how individuals’ financial literacy confidence bias affects their retirement planning behaviors using survey data in China. Based on the difference between respondents’ subjective and objective financial literacy from survey data, we construct measures of individuals’ financial literacy overconfidence and underconfidence for empirical analysis. Our results document the critical role of individuals’ assessment of financial literacy in their retirement planning. We find that individuals’ financial literacy overconfidence (underconfidence) significantly promotes (demotes) their retirement planning behaviors. |
| first_indexed | 2024-03-11T08:11:46Z |
| format | Article |
| id | doaj.art-570d965f2f304d8d8c37f449b2b47f77 |
| institution | Directory Open Access Journal |
| issn | 2227-9091 |
| language | English |
| last_indexed | 2024-03-11T08:11:46Z |
| publishDate | 2023-02-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Risks |
| spelling | doaj.art-570d965f2f304d8d8c37f449b2b47f772023-11-16T23:05:11ZengMDPI AGRisks2227-90912023-02-011124610.3390/risks11020046Financial Literacy Confidence and Retirement Planning: Evidence from ChinaBingzheng Chen0Ze Chen1Department of Finance, School of Economic and Management, Tsinghua University, Beijing 100084, ChinaChina Insurance Institute, Department of Insurance, School of Finance, Renmin University of China, Beijing 100872, ChinaThough ample empirical evidence demonstrates the relationship between objective financial literacy and retirement planning, we have a limited understanding of the role of individuals’ subjective financial literacy in their retirement planning. In this study, we examine how individuals’ financial literacy confidence bias affects their retirement planning behaviors using survey data in China. Based on the difference between respondents’ subjective and objective financial literacy from survey data, we construct measures of individuals’ financial literacy overconfidence and underconfidence for empirical analysis. Our results document the critical role of individuals’ assessment of financial literacy in their retirement planning. We find that individuals’ financial literacy overconfidence (underconfidence) significantly promotes (demotes) their retirement planning behaviors.https://www.mdpi.com/2227-9091/11/2/46financial literacyoverconfidenceunderconfidenceretirement planning |
| spellingShingle | Bingzheng Chen Ze Chen Financial Literacy Confidence and Retirement Planning: Evidence from China Risks financial literacy overconfidence underconfidence retirement planning |
| title | Financial Literacy Confidence and Retirement Planning: Evidence from China |
| title_full | Financial Literacy Confidence and Retirement Planning: Evidence from China |
| title_fullStr | Financial Literacy Confidence and Retirement Planning: Evidence from China |
| title_full_unstemmed | Financial Literacy Confidence and Retirement Planning: Evidence from China |
| title_short | Financial Literacy Confidence and Retirement Planning: Evidence from China |
| title_sort | financial literacy confidence and retirement planning evidence from china |
| topic | financial literacy overconfidence underconfidence retirement planning |
| url | https://www.mdpi.com/2227-9091/11/2/46 |
| work_keys_str_mv | AT bingzhengchen financialliteracyconfidenceandretirementplanningevidencefromchina AT zechen financialliteracyconfidenceandretirementplanningevidencefromchina |