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Financial literacy and retirement planning in chile*


This paper studies the relationship between financial literacy and retirement planning in Chile, a country with mandatory defined contribution pension plans at the core of its retirement policy. Using a novel dataset, we find that very few Chileans are planning for their retirement and that the levels of financial literacy are remarkably low with only 47% of the population understand compound interest and only 18% understand the concept of inflation. We also find a positive and significant relationship between financial literacy and retirement planning suggesting that investments in financial education could have a substantial impact on the way people think about retirement and therefore on their ability to reach retirement with adequate resources.

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I would like to thank my thesis supervisors, Denzil Fiebig and John Piggott, and also Olivia S. Mitchell, for their guidance and comments. The ARC Centre of Excellence in Population Ageing Research (CEPAR) provided strong intellectual and financial support, which is gratefully acknowledged. Reviewers’ comments led to considerable improvements in the final manuscript. Preliminary versions of this work were presented at UNSW where seminar participants, Stanley Cho, Denise Doiron, and Alan Woodland, provided useful comments.

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This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

Patrick J. Bayer , B. Douglas Bernheim , and John Karl Scholz (2009) The effects of financial education in the workplace: evidence from a survey of employers. Economic Inquiry, 47(4): 605624.

Jere R. Behrman , Olivia S. Mitchell , Cindy K. Soo , and David Bravo (2012) How financial literacy affects household wealth accumulation. American Economic Review, 102(3): 300304.

B. Douglas Bernheim and Daniel M. Garrett (2003) The effects of financial education in the workplace: evidence from a survey of households. Journal of Public Economics, 87(7/8): 1487.

Annamaria Lusardi and Olivia S. Mitchell (2014) The economic importance of financial literacy: theory and evidence. Journal of Economic literature, 52(1): 544.

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Journal of Pension Economics & Finance
  • ISSN: 1474-7472
  • EISSN: 1475-3022
  • URL: /core/journals/journal-of-pension-economics-and-finance
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