Download or read book Three Essays on Financial Literacy, Financial Self-awareness, and Retirement Well-being written by and published by . This book was released on 2012 with total page 350 pages. Available in PDF, EPUB and Kindle. Book excerpt: There has been growing concern about the level of the financial literacy of the U.S. population, in part due to the growing responsibility placed on individuals for retirement planning. While there may be general consensus that increased understanding of financial transaction may be beneficial, it remains unclear what types of financial knowledge are most vital to good financial outcomes, and more importantly, whether greater knowledge makes a difference to later life financial well-being. This dissertation addresses these issues in three essays. In essay 1, I introduce a concept which I term "financial self-awareness," that captures important aspects of financial literacy that are not captured in literacy measures most prevalent in the literature. Financial self-awareness is derived from questions about individuals' knowledge of their own financial assets and is intended to represent a mindset that reflects the degree to which individuals monitor and are alert to their financial situation. In essay 2, inspired by modified human capital theory that incorporates psychological human capital, I examine whether personality traits and psychological orientations explain variations in the level of financial self-awareness. Using data from the Wisconsin Longitudinal Study (WLS), I examine the role of personality traits and psychological characteristics in financial self-awareness, as direct effects or as mediators in the relationship between cognition and financial self-awareness. Results show that financial self-awareness is a distinct attribute, not merely a proxy for personality or cognitive abilities. In essay 3, using this measure of financial self-awareness, I examine its consequences for retirement well-being, as measured by wealth accumulation. I find that for individuals with lower to moderate wealth, greater financial self-awareness, that is having more awareness (knowledge) of financial assets, is associated with holding more wealth. This study contributes to the literature by introducing and validating financial self-awareness as an important and distinct measure from existing financial literacy measures, and documenting for which economic groups financial self-awareness makes a difference and therefore most likely to be in need of and benefit from financial education. Providing better-targeted interventions that specifically promote financial self-awareness would be expected to improve financial well-being in later life.