Financial Literacy and Retirement Planning in Japan

by Shizuka Sekita; CeRP WP N. 108/11

The paper has been realized for the Netspar Theme grant project Financial Literacy: Evidence and Implications for Retirement Planning, Saving Behavior, and Financial Education Programs” and presented at the CeRP workshop “Financial Literacy around the World” (FLat World) (Collegio Carlo Alberto, 20-21 December 2010).


Using micro data on Japanese households, I provide an overview of the level of financial literacy in Japan, analyze the determinants of financial literacy and link financial literacy to retirement planning. Overall, the level of financial literacy is low in Japan. Surprisingly, many Japanese responded that they did not know the answer in at least one question. In addition, I found that females, the young, and individuals with lower incomes and lower education levels are financially illiterate. Moreover, as expected, I found that financial literacy increases the probability of having a savings plan for retirement.

Published: March 2011

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