Financial literacy and voluntary savings for retirement: novel causal evidence

Cupák, Andrej, Kolev, Gueorgui and Brokešová, Zuzana (2019) Financial literacy and voluntary savings for retirement: novel causal evidence. The European Journal of Finance, 25 (16) . pp. 1606-1625. ISSN 1466-4364 [Article] (doi:10.1080/1351847X.2019.1641123)

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We utilise recent Household Finance and Consumption Survey microdata to report first causal effects of financial literacy on voluntary private pension schemes participation for a Central and Eastern European (CEE) country, namely Slovakia. Savings for retirement in the supplementary pension schemes are positively associated with financial literacy after controlling for a set of relevant socio-economic variables. One additional correctly answered financial literacy question leads to a 5.6 percentage points increase in the probability of having a voluntary pension savings plan in our ordinary least squares estimates. The causal impact of financial literacy increases to 19.5 percentage points when we address potential endogeneity problems by novel to the literature instrumental variables.

Item Type: Article
Research Areas: A. > Business School > Economics
Item ID: 27164
Notes on copyright: This is an Accepted Manuscript of an article published by Taylor & Francis in The European Journal of Finance on 22/07/2019, available online:
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Depositing User: Gueorgui Kolev
Date Deposited: 22 Jul 2019 08:41
Last Modified: 07 Feb 2021 18:16

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