Smart Money? The Effect of Education on Financial Outcomes

• 成果类型: Article
• 署名作者: Cole, Shawn; Paulson, Anna; Shastry, Gauri Kartini
• 署名单位: National Bureau of Economic Research; Harvard University; Federal Reserve System - USA; Federal Reserve Bank - Chicago; Wellesley College
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhu012
• 发表日期: 2014
• 页码: 2022
• 关键词: participation; BEHAVIOR; average; income

摘要

Household financial decisions are important for household welfare, economic growth, and financial stability. Yet our understanding of the determinants of financial decision making is limited. Exploiting exogenous variation in state compulsory schooling laws in both standard and two-sample instrumental variable strategies, we show that education increases financial market participation, measured by investment income and equities ownership, while dramatically reducing the probability that an individual declares bankruptcy, experiences a foreclosure, or is delinquent on a loan. Further results and a simple calibration suggest that the result is driven by changes in savings or investment behavior, rather than simply increased labor earnings.