Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/289445 
Year of Publication: 
2023
Series/Report no.: 
ZEW Discussion Papers No. 23-071
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
We examine financial literacy in Germany and its relevance for financial well-being. Using data from the Panel on Household Finances collected in 2021, we show that about 62% of German households answer the Big Three financial literacy questions correctly. Those with lower education, who are out of the labor force, women, and those living in East Germany have lower levels of financial literacy. Identifying groups with lower financial literacy and developing strategies to reach them and enhance their abilities should therefore be an integral part of the German national financial literacy strategy. Financial literacy is linked to financial well-being: we document that those with higher financial literacy have a higher stock market participation rate and are less likely to report financial difficulties.
Subjects: 
Financial knowledge
financial well-being
inflation
investment behavior
JEL: 
G53
D14
G51
I3
Document Type: 
Working Paper

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