Selected Research & Analysis: Financial Literacy, Knowledge, and Education

See also related Extramural Projects.

Mixed-Methods Study to Understand Public Use of Social Security's Online Platform
from Social Security Bulletin, Vol. 83, No. 4 (released November 2023)
by Lila Rabinovich and Francisco Perez-Arce

In this article, the authors use quantitative analysis of survey data and qualitative analysis of personal interviews to examine public awareness and use of online my Social Security accounts. The accounts are the Social Security Administration's platform for providing both general and personalized retirement-preparation information, including benefit estimators, along with other agency services. The authors explore internet literacy and demographic factors that may affect platform access and use. They also review the experiences and reactions reported by individual platform users.

Differences in Use and Perceptions of Retirement Planning Information Sources by Race and Ethnicity: Findings From the Understanding America Study
Research and Statistics Note No. 2023-01 (released September 2023)
by Richard E. Chard, Matt Messel, and David Rogofsky

The authors use survey data for 2014–2021 from the Understanding America Study to explore use of and attitudes toward different retirement planning information sources by respondent race and ethnicity. They report on respondents' perceptions of the accessibility, understandability, accuracy, and usefulness of retirement planning information available from social networks, employers, financial planners, the Social Security Administration, and other sources. This research may help in guiding effective targeted outreach to racial and ethnic groups, and in identifying potential barriers to access to underused sources.

Public Knowledge About the Social Security Retirement Program: Differences by Race and Ethnicity
from Social Security Bulletin, Vol. 83, No. 3 (released August 2023)
by Richard E. Chard, Matt Messel, and David Rogofsky

Using data from the first three waves of the Understanding America Study, the authors examine how public knowledge of the Social Security retirement program helps individuals make optimal decisions about saving and the timing of benefit claiming. They use descriptive statistics to highlight differences in program knowledge by respondents' race and ethnicity as well as by age, education level, and sex. They also discuss the implications of their findings and suggest directions for future research.

Public Knowledge About the Social Security Administration's Disability Programs: Findings from the Understanding America Study
from Social Security Bulletin, Vol. 82, No. 4 (released November 2022)
by Matt Messel, Tokunbo B. Oluwole, and David Rogofsky

Using 2021 survey results from the nationally representative panel of Understanding America Study respondents, the authors of this article explore public knowledge of various aspects of the Social Security Disability Insurance and Supplemental Security Income programs. They present descriptive statistics that highlight different levels of program knowledge from one program aspect to another as well as across respondent characteristics such as age, race/ethnicity, educational attainment, income, and presence of a long-term disabling condition. Program aspects covered in the survey questions include financial and medical eligibility for program benefits, application and disability determination procedures, and typical processing times and benefit amounts.

Where Is Information About Social Security Retirement Benefits Provided to the Public? An Initial Assessment
from Social Security Bulletin, Vol. 82, No. 1 (released February 2022)
by Lois A. Vitt and Barbara A. Smith

Research has documented how knowledgeable Americans are about certain aspects of Social Security programs and benefits. As a result, researchers have identified information gaps in both the types of knowledge that individuals optimally should have and the demographic groups who would most benefit from informational outreach. However, research has not investigated the settings in which Social Security information is or could be provided to the public by sources other than the Social Security Administration. This article explores the presence and extent of Social Security information provided to employees in workplaces, servicemembers in military facilities, students in secondary and postsecondary schools, and participants in religious and community organization settings. The authors visited seminars and classes; interviewed trainers and educators; and reviewed textbooks, other publications, and Internet content to assess where this important information is—or could be—provided to the public.

Workers' Expectations About Their Future Social Security Benefits: How Realistic Are They?
from Social Security Bulletin, Vol. 81, No. 4 (released November 2021)
by John A. Turner and David Rajnes

This study examines workers' expectations about their future Social Security benefits. The authors compile and analyze results of more than 60 individual surveys covering 1971 through 2020, with more than 130,000 respondents in total. The authors compare results over time and by demographic group to examine how Social Security expectations vary. They investigate possible explanations for the variations they find as well as for the finding that workers' expectations tend to be more pessimistic than Social Security actuarial projections.

Hispanics' Knowledge of Social Security: New Evidence
from Social Security Bulletin, Vol. 79, No. 4 (released November 2019)
by Janice Peterson, Barbara A. Smith, and Qi Guan

Although Hispanics rely more on Social Security benefits for retirement income than other population groups, their knowledge about the programs is shallower. The authors of this article use data from a large Internet survey panel to identify gaps in Social Security knowledge between Hispanics and non-Hispanic whites and among Hispanics across ancestry and primary-language groups and test the statistical significance of their findings. The results offer insights for further research and guidance for policy that aims to promote retirement security for U.S. Hispanics.

The Use of Longitudinal Data on Social Security Program Knowledge
from Social Security Bulletin, Vol. 79, No. 4 (released November 2019)
by Laith Alattar, Matt Messel, David Rogofsky, and Mark A. Sarney

This article presents and compares results from the first two waves of Understanding America Study (UAS) surveys of public knowledge about Social Security programs. The article briefly reviews the Social Security Administration's past efforts to gauge public knowledge of the programs, describes the UAS survey instrument used in the current effort, and presents survey results with detail by respondent age, education, and financial literacy level. Among the authors' findings are that younger workers with lower levels of education and financial literacy are logical targets for agency informational outreach and interventions.

An Introduction to the Understanding America Study Internet Panel
from Social Security Bulletin, Vol. 78, No. 2 (released May 2018)
by Laith Alattar, Matt Messel, and David Rogofsky

This article provides an overview of the Understanding America Study (UAS), a nationally representative Internet panel of approximately 6,000 adult respondents that is administered by the University of Southern California. The UAS, which began in 2014, represents one of the richest sources of panel data available in the United States. It includes over 50 survey modules on topics such as retirement planning, economic well-being, and psychological constructs. This article reviews the UAS methodology; describes how external researchers may commission UAS surveys, incorporate their own survey questions and methodological experiments, and conduct randomized controlled trials; highlights selected publicly available data from UAS surveys on cognition, personality, financial literacy and behaviors, political views, and other topics; and discusses opportunities for external parties to work with UAS administrators in developing new surveys and future lines of research.

Hispanics' Understanding of Social Security and the Implications for Retirement Security: A Qualitative Study
from Social Security Bulletin, Vol. 77, No. 3 (released August 2017)
by Lila Rabinovich, Janice Peterson, and Barbara A. Smith

This article discusses why effective outreach to Hispanics is important to improve their understanding of Social Security and enhance their retirement security. It examines Social Security literacy and preferred ways of receiving information about the program by using focus groups of three ancestries (Mexican, Puerto Rican, and Cuban) and of English and Spanish speakers. This article is one of the first to research between-group differences and discuss their implications.

Financial Literacy Among American Indians and Alaska Natives
Research and Statistics Note No. 2014-04 (released August 2014)
by John L. Murphy, Alicia Gourd, and Faith Begay

This study uses data from the Health and Retirement Study (HRS) to analyze financial literacy within the American Indian and Alaska Native (AIAN) population. The HRS is a nationally representative longitudinal survey of individuals aged 50 or older and their spouses. The study compares AIAN financial literacy scores from an 18-question financial literacy module with those from other racial groups, all of whom score higher than the AIAN sample.

Psychosocial Factors and Financial Literacy
from Social Security Bulletin, Vol. 73, No. 1 (released February 2013)
by John L. Murphy

This article explores how psychosocial variables relate to financial literacy. Although prior research has examined mainstay economic variables, this study examines whether previously unexplored variables—financial satisfaction, hopelessness, and religiosity—impact financial literacy. The study uses Health and Retirement Study data and finds that financial satisfaction and religiosity are associated with financial literacy.

Raising Household Saving: Does Financial Education Work?
from Social Security Bulletin, Vol. 72, No. 2 (released May 2012)
by William G. Gale, Benjamin H. Harris, and Ruth Levine

Financial illiteracy is prevalent in the United States, and low levels of financial literacy are associated with poor financial choices and negative economic outcomes. We examine previous work on the effect of financial education on household saving and find mixed results. Workplace financial education seminars positively affect household saving, but the size of this effect varies widely across studies. The effects of other financial education initiatives are less clear, highlighting the need for rigorous econometric evaluation of efforts to improve financial literacy.

Effective Retirement Savings Programs: Design Features and Financial Education
from Social Security Bulletin, Vol. 67, No. 3 (released April 2008)
by Anya Olsen and Kevin Whitman

This article provides an overview of the literature on best practices for retirement savings plan design and financial education in the workplace. Without a successful plan design, financial education will not be effective and even a well-structured plan can fail to achieve retirement savings goals without financial education. The main components of a retirement savings program that employers must consider include options for enrollment, investment choices, employer matching of contributions, and distributions over the working career and at retirement. In addition, employers control the core aspects of financial education, such as the topics covered, the delivery methods used, the frequency with which it is offered, and its general availability.

Does Retirement Education Teach People to Save Pension Distributions?
from Social Security Bulletin, Vol. 64, No. 4 (released June 2003)
by Leslie A. Muller

Education about retirement affects how employees use distributions from their defined contribution pension plans. Retirement education substantially increases the probability that participants age 40 and under will save a distribution but decreases the probability that college graduates and women will save one. These important differentials are concealed by estimates of the effect of retirement education on participants generally.

The Economics of Retirement: A Nontechnical Guide
from Social Security Bulletin, Vol. 59, No. 4 (released October 1996)
by Michael V. Leonesio

Concern about the economic consequences of the aging of the United States population has prompted considerable research activity during the past two decades. Economists have carefully examined retirement patterns and trends, and sought to identify and measure the determinants of the timing of retirement by older workers. Much of the published retirement research is fairly technical by nature and is somewhat inaccessible to nonspecialist audiences. This article provides a nontechnical overview of this research. In contrast to other reviews of the retirement literature, this exposition emphasizes the basic ideas and reasoning that economists use in their research. In the course of recounting how economists' views about retirement have evolved in recent years, the article highlights landmark pieces of research, points out the specific advances made by the various researchers, and assesses what has been learned along the way.

The Economics of Retirement: A Nontechnical Guide
ORES Working Paper No. 66 (released April 1995)
by Michael V. Leonesio

This paper provides a nontechnical explanation of the basic ideas that underpin economists' thinking about work and retirement decisions and discusses and elaborates on the basic economic model of retirement. The paper begins with a simple economic model of an individual's work decision, to explain the construction and logic of this model, and to show how the model can be used to make basic predictions about factors that might plausibly affect the timing of retirement. From this starting point—which essentially describes the economic retirement models before the late 1970s—the paper then explains how the model has been extended during the past 2 decades. The increasing sophistication and complexity of the models reflect scientific progress in which new retirement research incorporates the findings of previous efforts, the desire to incorporate more realism into the models, and the availability of improved data. The progress in economic modeling is emphasized as the contributions of various influential studies are reviewed.

Knowledge of Social Security: Survivor Families With Young Children
from Social Security Bulletin, Vol. 46, No. 12 (released December 1983)
by Julian Abbott