How researchers say we could make New Zealanders richer
New research from AUT professor Bart Frijns suggests that improving financial literacy can lead to significant increases in personal income and wealth accumulation. The study indicates that financial knowledge is a key driver of long-term economic success rather than just a byproduct of wealth.
Why it matters
The findings suggest that public policy focused on financial education could be an effective tool for reducing wealth inequality at retirement.
There could be a simple way to make some New Zealanders 25 percent more wealthy, new research suggests: Make them more financially literate .
AUT professor Bart Frijns has co-authored research looking at the long-term impact of financial literacy on wealth.
He said it sought to examine whether financial literacy was a cause or a consequence of financial success.
"Very often what we see is that people that are wealthier tend to be more financially literate but that's simply because they have more money and therefore invest more in financial literacy. What we really wanted to figure out is, is there a really clear relationship between improvement in financial literacy and then better financial outcomes later in life?"
He used longitudinal data on Dutch households and connected financial literacy measured in 2011 with financial outcomes in 2019 for 475 individuals.
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