Understanding the Financial Knowledge Gap: A New Dimension of Inequality in Later Life |
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| Authors: | Mohammad Nuruzzaman Khan David W Rothwell Katrina Cherney Tamara Sussman |
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| Institution: | 1. School of Social Work, McGill University, Montreal, Québec, CanadaMohammad.khan7@mail.mcgill.ca;3. Human Development and Family Sciences, Oregon State University, College of Public Health, Corvallis, Oregon, USA;4. School of Social Work, McGill University, Montreal, Québec, Canada |
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| Abstract: | ABSTRACTTo understand individuals’ financial behaviors, it is important to understand the financial knowledge gap – the distance between one’s objective and subjective financial knowledge. Overestimating one’s financial knowledge can lead to risky financial behaviors. To date, limited empirical work has examined how financial knowledge gap varies across age groups. We analyze the size and nature of the financial knowledge gap and its variation across age groups. Using nationally representative data, we find robust evidence that older adults overestimate their financial knowledge. Social workers can assess the financial knowledge gap and educate their clients to protect from financial fraud, exploitation, and abuse. |
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| Keywords: | Financial knowledge financial knowledge gap financial capability older adults |
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