Open Access. Powered by Scholars. Published by Universities.®
Social and Behavioral Sciences Commons™
Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 2 of 2
Full-Text Articles in Social and Behavioral Sciences
Financial Knowledge And Portfolio Complexity In Singapore, Benedict S. K. Koh, Olivia S. Mitchell, Susann Rohwedder
Financial Knowledge And Portfolio Complexity In Singapore, Benedict S. K. Koh, Olivia S. Mitchell, Susann Rohwedder
Research Collection Lee Kong Chian School Of Business
Financial literacy in Singapore has not been analyzed in much detail, despite the fact that this is one of the world’s most rapidly aging nations. Using the Singapore Life Panel®, we explore older Singaporeans’ levels of financial knowledge and compare them to those observed in the United States. We assess portfolio complexity for these older households, to examine how financial literacy is related to outcomes of interest. We show that older Singaporeans’ levels of financial literacy are comparable overall to those in the United States, even though older Singaporeans score slightly lower on some dimensions (knowledge of interest and inflation), …
Financial Illiteracy And Pension Contributions: A Field Experiment On Compound Interest In China, Changcheng Song
Financial Illiteracy And Pension Contributions: A Field Experiment On Compound Interest In China, Changcheng Song
Research Collection Lee Kong Chian School Of Business
I conduct a field experiment to study the relationship between peoples’ misunderstanding of compound interest and their pension contributions in rural China. I find that explaining the concept of compound interest to subjects increased pension contributions by roughly 40%. The treatment effect is larger for those who underestimate compound interest than for those who overestimate compound interest. Moreover, financial education enables households to partially correct their misunderstanding of compound interest. I structurally estimate the level of misunderstanding of compound interest and conduct a counterfactual welfare analysis: lifetime utility increases by about 10% if subjects’ misunderstanding of compound interest is eliminated.