Title

Trust, financial literacy, and financial market participation

Document Type

Article

Publication Date

10-2022

Abstract

Willingness to participate in financial markets is important for financial well-being, including the accumulation of retirement savings through self-directed pension programs. We consider the roles of two key factors, trust and financial literacy in financial market participation. We find both are strongly related to participation. Although trust is more uniformly correlated with increases in financial market participation, the relationship between financial literacy and engagement is u-shaped, with increases in financial literacy first associated with reductions and subsequently with increases in the levels of participation. Our findings suggest trust and financial literacy play different roles and that each is related to investment behaviors in important ways.

Keywords

financial literacy, financial market participation, trust

Publication Title

Journal of Pension Economics & Finance

Publication Citation

21 J. Pens. Econ. & Fin. 634 (2021).

https://www.cambridge.org/core/journals/journal-of-pension-economics-and-finance/article/trust-financial-literacy-and-financial-market-participation/03A77810B7E4AD1BCF1E5DC7E6DAF0C8/share/3dee92c3a446fe4412f07628bae38a74e969288c

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