Financial literacy in the Understanding America Study

Abstract

Abstract We provide a brief history of administering financial literacy questions in probability-based Internet panels. After financial literacy questions were asked in the Centerpanel in the Netherlands and the RAND American Life Panel, the Understanding America Study (UAS) has been administering 14 financial literacy questions in its biannual core surveys since 2014. Due to its longitudinal nature and the vast amount of available information on its panel members, the UAS provides unique opportunities for analyzing patterns of financial literacy over time and its associations with financial outcomes, cognition, health, personality, and economic preferences, among others. The UAS survey-based dataset is further enriched with administrative records from consenting respondents. Importantly, researchers can incorporate additional questions and modules to gather specific data, which can then be linked to both existing and forthcoming information on panel members. In this paper, we describe the UAS financial literacy measures and offer descriptive analyses, highlighting the patterns of financial knowledge over time and by individuals’ background characteristics. We also show how financial outcomes, such as financial wealth and retirement preparedness, relate to financial literacy scores.