By Percy A. Austin
Agenda
Introduction
II. Problem Statement
III. Financial barriers
II. Types of Interventions
III. Literature Review
IV. Methodology
V. Discussion
VI. Future Suggestions
I.
Introduction
C.F.A. and F.P.A.
 Wealth Accumulation (dependent variable)
 Retirement (dependent variable)
 Lottery (independent variable)
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Lower private saving
Longer retirement periods
Contribution plans
Introduction cont …
Working Definition: Financial Literacy
Problem Statement
Question:
 Have past or current financial literacy
initiatives modified individuals’ spending,
saving or investing behavior.
 Lusardi (2004)
 Gale and Devine (2010)
Financial literacy is essential to:
 making optimal financial, investment,
and retirement decisions.
Financial Barriers
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Income
Competing obligations
Inexperience
Social Security Income, Withdrawals and
Payouts
Marital Status
Asset Allocation
Employment-Based Retirement Plan
Participation
Occupation
Psychology and background
Types of Interventions
Type I
 One-on-one counseling, telephone
advising and computer or internet learning
Type II
 Seminars or presentations, training
workshops or workshop series
Type III
 Web-based programs, interactive CD
programs, TV programs and newsletters or
papers
Literature Review
Lusardi (2004)
Gale&Levine
Discussion
Question: Why are interventions working?
 Structure
 Informed Consumers
Question: Why aren’t interventions
working?
 Cultural differences
 Economic Realities
Discussion cont…
Constant theme and relationship
throughout studies, financial literacy is:
 relatively low
 lack of financial knowledge
 Economic hardships
 employer-provided financial education
Future Suggestion(s)
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Better information on minority
participation: Hobson
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More automatic enrollment: Hewitt.
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More flexible rules for 401(k) loans:
Towers Perrin.
Future Suggestion cont …
References
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Cognitive Abilities and Household Financial Decision Making by Sumit
Agarwal and Bhashkar MazumderJournal of Economic Behavior &
Organization Volume 95, November 2013, Pages 159–174: “Discounting
financial literacy: Time preferences and participation in financial education
programs.” Stephan Meier. Charles D. Sprenger
National Institute on Retirement Security. Pgs 1-30.”The Retirement Savings
Crisis: Is It Worse Than We Think.”Nari Rhee, PhD
International Journal Of Consumer Studies: Volume 36, Issue 5 September
2012.Pages 523–530Financial Literacy Education and Behavior Unhinged:
Combating Bias and Poor Product Design.”Jason West
Economic Inquiry Volume 50, Issue 4, October 2012, Pages: 851–866,Title:
The Role of Financial Literacy in Determining Retirement Plans: Robert
Clark, Melinda Sandler Morrill, Steven G. Allen
The Economic Journal Volume 122, Issue 560, May 2012, Pages: 449–478,
Maarten C.J. van Rooij.Financial Literacy, Retirement Planning and
Household Wealth: Annamaria Lusardi and Rob J.M. Alessie
Association for Financial Counseling and Planning Education. (1999)Vol.10
pgs 1-11: “Cash Flow Management: A Framework Of Daily Family
Activities”: Glenn Muske and Mary Winter
References cont…

www.ssa.gov
 www.epi.org
 www.pewsocialtrends.org
 www.census.illinois.gov/
 www.illinois-demographics.com
 www.census.gov/
 www.census.gov/history/
 www.census.gov/regions/