Work

The racial/ethnic gap in financial literacy in the population and by income

Year: 2020

Type: article

Abstract: We investigate the determinants of the racial/ethnic gap in financial literacy in the general population and within income classes, with a focus on childhood family circumstances and neighborhood socioeconomic characteristics. Our model explains 48% and 57% of the observed gap for Blacks and Hispanics, respectively. For both groups, differences in individual characteristics and neighborhood socioeconomic status contribute the most to the explained gap. The White–Minority gap narrows when moving from low‐ to high‐income classes, but the ability of the model to explain it decreases monotonically. Identifying which additional barriers put minorities at a disadvantage is key to improve financial literacy.

Source: Contemporary Economic Policy

DOI: 10.1111/coep.12507

Authors: Marco Angrisani, Sergio Barrera, Luisa R. Blanco, Salvador Contreras

Institutions: University of Southern California, University of Minnesota, University of Minnesota System, Pepperdine University, The University of Texas Rio Grande Valley

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Reduced inequalities, No poverty

Open Access status: hybrid

Estimated APC paid: $2,500