1887

OECD Working Papers on Finance, Insurance and Private Pensions

Selected studies on finance, insurance and private pensions policy prepared for dissemination in order to stimulate wider discussion and further analysis and obtain feedback from interested audiences. The studies provide timely analysis and background on industry developments, structural issues, and public policy in the financial sector. Topics include risk management, governance, investments, benefit protection, and financial education. Previous papers addressing these policy issues are available via http://dx.doi.org/10.1787/19936397.

English

Financial Education for Long-term Savings and Investments

Review of Research and Literature

Long-term savings and investments (LTSI) by individuals enhances their financial security while also supporting growth and financial development. Evidence shows that financial knowledge and skills are positively related to LTSI behaviour, and indicates a strong correlation between levels of financial literacy and retirement wealth accumulation. However, both the quantity and quality of LTSI are often worryingly low, pointing to an important role for financial education to increase levels of financial literacy and thus improve LTSI among individuals. Evaluations of various types of financial education aimed at increasing LTSI have identified some promising results. Initial findings suggest the need for additional, targeted evaluation of education programmes to compare the effects of different delivery channels and the intensity of provision in order to identify optimal approaches. More detailed research is also important to fully understand why some evaluations indicate mixed outcomes from certain programmes.

English

Keywords: financial education, saving, long-term investing
JEL: D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions; D14: Microeconomics / Household Behavior and Family Economics / Household Saving; Personal Finance; I21: Health, Education, and Welfare / Education and Research Institutions / Analysis of Education; D04: Microeconomics / General / Microeconomic Policy: Formulation, Implementation, and Evaluation; G28: Financial Economics / Financial Institutions and Services / Financial Institutions and Services: Government Policy and Regulation
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