Financial Literacy and Retirement Planning: The Russian Case

University of Essex CER Working Paper No. 3

36 Pages Posted: 13 Jan 2012

See all articles by Leora F. Klapper

Leora F. Klapper

World Bank; World Bank - Development Research Group (DECRG)

Georgios A. Panos

University of Glasgow - Adam Smith Business School

Multiple version iconThere are 2 versions of this paper

Date Written: August 23, 2011

Abstract

Our study contributes to the financial literacy literature by examining its association with retirement planning in an interesting and novel context, i.e. that of a country with a relatively old and rapidly ageing population, large regional disparities and a rapidly emerging financial market. Even though consumer borrowing is increasing very rapidly in Russia, we find that only 36.3% of respondents in our sample know about the working of interest compounding and only half can answer a simple question about inflation. In a country with pervasive public pension provision, we find that financial literacy is significantly and positively related to retirement planning using private pension funds and schemes. Residents in rural areas are much more reliant on the public provision and invest less in private schemes and savings. The results of our study have a clear policy implication; along with encouraging the availability of private retirement plans and financial products, efforts to improve financial literacy can be pivotal to the expansion in the use of such schemes.

Keywords: Financial Literacy, Retirement Planning, Pensions, Russia

JEL Classification: D91, G11, G23

Suggested Citation

Klapper, Leora F. and Panos, Georgios A., Financial Literacy and Retirement Planning: The Russian Case (August 23, 2011). University of Essex CER Working Paper No. 3, Available at SSRN: https://ssrn.com/abstract=1984059 or http://dx.doi.org/10.2139/ssrn.1984059

Leora F. Klapper (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
202-473-8738 (Phone)

HOME PAGE: http://econ.worldbank.org/staff/lklapper

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Georgios A. Panos

University of Glasgow - Adam Smith Business School ( email )

Gilbert Scott Building
University Avenue
Glasgow, Scotland G128QQ
United Kingdom

HOME PAGE: http://https://sites.google.com/site/georgiosapanos/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
255
Abstract Views
1,287
rank
118,220
PlumX Metrics