Financial literacy and confidence - an information provision experiment

Research on financial literacy shows that women and older people have significantly lower levels of financial literacy. This has implications for investment and savings decisions, especially in light of an increasingly complex financial system and the growing need for individual retirement planning. Confidence can be a driving force in answering financial literacy questions and in financial decision making. For example, older individuals continue to show high levels of confidence in financial decision making, despite declining financial literacy scores at older ages (Finke et al. 2017). In addition, women have less confidence in their own abilities with regard to financial matters (Lusardi and Mitchell 2014). We would like to make the following contributions to the literature: We want to address the question of whether certain information about gender or age differences in mathematical competencies in everyday life has an impact on their confidence in answering financial literacy questions. Furthermore, we want to investigate how this information then affects the hypothetical investment or savings decisions of the respective groups. We also want to analyze how this information affects preferences for policies aimed at reducing these disparities. Through our study, we aim to provide a nuanced picture of financial literacy and resulting hypothetical investment and savings decisions in the context of individual confidence in their own decisions.