Title

THE RACIAL/ETHNIC GAP IN FINANCIAL LITERACY IN THE POPULATION AND BY INCOME

Document Type

Article

Publication Date

1-1-2020

Abstract

We investigate the determinants of the racial/ethnic gap in financial literacy in the general population and within income classes, with a focus on childhood family circumstances and neighborhood socioeconomic characteristics. Our model explains 48% and 57% of the observed gap for Blacks and Hispanics, respectively. For both groups, differences in individual characteristics and neighborhood socioeconomic status contribute the most to the explained gap. The White–Minority gap narrows when moving from low- to high-income classes, but the ability of the model to explain it decreases monotonically. Identifying which additional barriers put minorities at a disadvantage is key to improve financial literacy. (JEL G5, J15, Z13).

Publication Title

Contemporary Economic Policy

ISSN

10743529

E-ISSN

14657287

DOI

10.1111/coep.12507

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