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Understanding the Financial Capability of Americans

These research studies explore different elements of financial capability, including the financial knowledge, resources and habits of Americans.

Why Is Measured Financial Literacy Declining and What Does It Mean? Maybe We Just “Don’t Know.”Why Is Measured Financial Literacy Declining and What Does It Mean? Maybe We Just Don’t Know.
This research examines data from the 2009 to 2018 waves of the National Capability Study to examine trends in financial literacy. The findings indicated that measured financial literacy declined over the 12-year period. Most of the decline resulted from a rise in respondents reporting they “don’t know” the answers to the underlying questions. The study also found that despite declines in measured financial literacy, several indicators of financial capability improved over the same period.

Financial Education Matters: Testing the Effectiveness of Financial Education Across 76 Randomized ExperimentsFinancial Education Matters Testing Effectiveness Financial Education
This meta-analysis examines data from 76 randomized financial education experiments across 33 different countries covering over 160,000 people. The findings suggest that financial education is cost-effective and produces large effects on financial knowledge and medium effects on financial behavior.

Bridging the Divide: A Closer Look at Changes in the Racial and Ethnic Composition of Investor HouseholdsBridging the Divide: A Closer Look at Changes in the Racial and Ethnic Composition of Investor Households
This research explores the racial and ethnic composition of investors over a six-year period, from 2012 to 2018. The findings suggest that African American and Hispanic/Latino adults continue to be under-represented in the investor ranks. However, after controlling for sociodemographic variables, the gap in the likelihood of owning a taxable investment account between white and African American and Hispanic/Latino adults closes substantially. However, troubling gaps remain, with the likelihood of African American and Hispanic/Latina women owning a taxable investment account much lower than that of white men.

Recent Trends in Patient out-of-Pocket Cost SharingRecent Trends in Patient out-of-Pocket Cost Sharing
This study by the Employee Benefit Research Institute (EBRI) funded by the FINRA Foundation analyzes data from over 45 million patients covered by employer-sponsored health care plans to examine how out-of-pocket healthcare spending is trending in aggregate and by type of health plan. The study finds that the share of out-of-pocket costs paid by patients increased from 2013 to 2019. The increase appears to be driven by the growing number of workers enrolling in plans with higher deductibles, not by changes in cost-sharing.

What We Leave Behind: Financial Education and Estate PlanningWhat We Leave Behind: Financial Education and Estate Planning
This 2020 award-winning submission by Dr. Richard Stebbins and co-authored by Dr. Kyoung Tae Kim at the University of Alabama used data from the 2018 National Financial Capability Study to examine the association between financial education and basic estate planning. The findings indicated that more and better quality financial education is associated with a greater likelihood of having a will.

Financial Anxiety and Stress Among U.S. Adults: New Evidence from a National Survey and Focus GroupsFinancial Anxiety and Stress Among U.S. Adults: New Evidence from a National Survey and Focus Groups
This study from the Global Financial Literacy Excellence Center (GFLEC) and the FINRA Foundation found that a large share of U.S adults feel stress and anxiety in relation to their personal finances. Findings from the 2018 National Financial Capability Study were complemented with focus group discussions from late 2020. Financial stress and anxiety were prominent in women, younger adults, those with lower-incomes, and individuals low levels of financial literacy.

Bouncing Back? The Financial Resilience of Americans Bouncing Back? The Financial Resilience of Americans
This research from 2018 shows that Americans typically fall into one of four distinct groups of financial resilience: those Living on the Edge; those living Paycheck to Paycheck; those Holding Steady; and those who are Standing Strong. Nearly 4 in 10 households lacked financial resilience, while fewer than 2 in 10 appeared to be financially resilient.

The Stability and Predictive Power of Financial Literacy: Evidence From Longitudinal DataThe Stability and Predictive Power of Financial Literacy: Evidence From Longitudinal Data
This study from the FINRA Foundation, the University of Southern California, and George Washington University found that financial literacy measured in 2012 predicts financial outcomes in 2018.

 

 

 

The Foundation has an active research agenda on financial capability of American households and financial fraud in America.

Explore the National Financial Capability Study

Learn more about Financial Capability in the U.S. through the NFCS.


Download the 2021 NFCS Report

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Additional Research on Financial Capability

Beyond the NFCS, the Foundation maintains an active research agenda exploring the financial capability of adults in the United States. Read More >>


Consumer Insights: Money and Investing

The series explores trends and circumstances affecting the way people manage and invest their money. Read More >>


Aging and Financial Decision Making

These research studies explore the relationships between the aging brain and financial decision making. Read More >>