سواد مالی و برنامه ریزی بازنشستگی در هلند

The complexity of financial decisions that households now face has increased to unprecedented levels. At the same time, households seem to lack the financial knowledge to cope with these decisions, including how to save and invest adequately for retirement. In this paper, we examine the relationship between financial knowledge and retirement planning in the Netherlands. For this purpose, we have designed a module on financial literacy and planning for the De Nederlandsche Bank (DNB) Household Survey. We find a strong and positive relationship between financial knowledge and retirement planning; those who are more financially knowledgeable are more likely to plan for retirement. Using information on economics education acquired in school, we show that the nexus of causality goes from financial literacy to planning rather than the other way around.

Large household surveys on financial capability and money management in, for example, the United Kingdom, New Zealand, Ireland, the United States, and the Netherlands highlight significant heterogeneity in financial behavior and show that the typical household does not manage household finances well (Atkinson et al., 2006, OECD, 2005 and Van Raaij et al., 2008). One particular shortcoming is that households tend to be short-sighted when making financial decisions and may be ill-prepared for retirement. This is a matter of concern for policymakers as, over the past two decades, individuals and households have been increasingly expected to take responsibility for their own retirement security. In fact, many US employees have very little savings on the verge of retirement (Lusardi, 2003, Lusardi, 2004 and Lusardi and Mitchell, 2007a). In the Netherlands as well, it has become clear that many employees hold overly optimistic expectations about the level of their pension benefits, a finding that has induced an intensive debate on policy measures needed to close this expectations gap (AFM, 2009). At the same time, researchers have started to examine financial literacy and the implications of a lack of basic skills and economic knowledge for household financial decisions. For example, Lusardi and Mitchell (2006) designed three questions for the US Health and Retirement Survey (HRS) to measure numeracy as well as the understanding of basic economic concepts such as inflation and risk diversification. They find not only that many individuals lack basic financial knowledge but also evidence of a relationship between financial knowledge and retirement planning. This is an important finding as planning is a strong predictor for wealth: planners are much more likely to accumulate wealth than non-planners (Ameriks et al., 2003, Lusardi and Mitchell, 2007a and Van Rooij et al., 2008). We have designed a special module for the De Nederlandsche Bank (DNB) Household Survey that makes it possible to examine a larger set of measures of financial literacy than was feasible with earlier surveys. We gathered information on respondents’ level of financial knowledge, self-reported knowledge, and financial education in school (Van Rooij, Lusardi, & Alessie, in press). In addition, we gathered information on retirement planning. The survey was answered by respondents for whom an extensive set of background information was already available, including data on economic and psychological characteristics. Our main findings are as follows: Most households lack knowledge of fundamental financial concepts. Moreover, there exist vast differences in knowledge among respondents; women and those with low educational attainment display the lowest levels of financial knowledge. Most importantly, more financially knowledgeable households are more likely to plan for retirement, even after controlling for a large set of socioeconomic characteristics, including education and income. The positive relationship between financial literacy and retirement planning is an important observation in itself, but, in our work, we also attempt to assess the direction of causality. Using information on economics education in school, we show that it is financial literacy that affects retirement planning and not the other way around. These findings have important policy implications. For example, they show that the design of financial education programs and the implementation of measures aimed at improving financial literacy go hand in hand with a higher propensity to plan for retirement. Moreover, financial education programs as well as initiatives to increase financial knowledge should be targeted to those groups that are most lacking in knowledge. The outline of the paper is as follows. In Section 2 we briefly review literature on the relationship between financial literacy, retirement planning and wealth accumulation and discuss its findings. In Section 3 we explain the Dutch pension system and provide information on savings in retirement plans to facilitate the interpretation of the empirical results. In Section 4 we discuss the survey data. In Section 5 we discuss levels of financial knowledge in the Netherlands and the methodology used to measure financial literary. In Section 6 we introduce our retirement planning measure, discuss its relevance and present descriptive evidence on its relationship to saving behavior. In Section 7 we report the outcome of a multivariate regression analysis to explain variations in retirement planning. We focus on the role of financial literacy herein, using information on economics education when young to overcome potential endogeneity problems in the empirical analysis. In Section 8 we perform a sensitivity analysis to investigate the robustness of our results. In Section 9 we put the results into perspective and conclude with policy implications.

The analysis of our survey results leads to several conclusions. First, our findings highlight that many Dutch households do not plan much for retirement. These results are consistent with the outcomes of the Dutch Financial Capability Survey commissioned by the Treasury Department. That survey shows that the financial situation of large groups of consumers is vulnerable: one in ten consumers has difficulty in making ends meet and four in ten consumers does not have sufficient buffers to deal with large unforeseen expenditures or income shocks caused by unemployment, divorce, or the onset of a chronic illness. It also documents that while many households do not have clear long-term financial plans; those with a stronger long-term orientation actually do have a better overview of their finances, have fewer problems getting by, and are in a better position to withstand unforeseen expenses or income shocks (Van Raaij et al., 2008). Second, we provide evidence of widespread financial illiteracy that is in line with findings in the Financial Capability Survey and other studies suggesting that Dutch households have limited financial knowledge (see also Lusardi & Van Rooij, 2010). In particular, many workers in the Netherlands display not only a lack of knowledge about their pension but also a major lack of interest in pension issues, perhaps as a result of the compulsory participation in company retirement plans (Van Els et al., 2004 and Van Rooij et al., 2007). Nevertheless, we have argued in this paper that looking forward there is a strong need for Dutch households to plan for retirement. Moreover, for the current generation of workers it is relevant to prepare for retirement as recent research not only shows that many employees are overly optimistic about expected replacement rates, but also that existing retirement plans are mostly inadequate to fulfill desired consumption paths (Binswanger and Schunk, 2008 and Van Duijn et al., 2009).21 Other studies show that once Dutch households start making calculations to determine their actual desired retirement income replacement rate, they then also formulate concrete saving plans and are able to accumulate substantially more wealth than non-planners (Van Rooij et al., 2008). This mechanism might also explain why thinking about retirement is a powerful predictor of actual saving behavior as it captures information about the first step in a process of increasing awareness. Realizing that it is important to prepare for retirement is the first step; the next step is to calculate saving needs and develop a concrete saving plan. Psychological research has shown that concrete plans with specific steps are very powerful in increasing self-discipline. Experiments by Gollwitzer, 1996 and Gollwitzer, 1999 demonstrate that the development of concrete plans enables people to translate intentions into actions, thus leading to a greater likelihood of attaining stated goals. In this regard, simple planning activities might enable consumers who want to save but who find it difficult to control their expenses to overcome problems of self-control (Ameriks, Caplin, Leahy, & Tyler, 2007). If these techniques provide a mechanism through which consumers can remedy a lack of self-control, this might explain why merely thinking about retirement contributes to large differences in the accumulation of retirement wealth as found by Lusardi and Mitchell (2007a). Third, we document a significantly positive and economically meaningful association between financial sophistication and planning for retirement. While this positive association is an important observation, we also assess the causal impact of financial literacy using information on economics education when young. Indeed, we do find a strong causal impact. Although this result admittedly hinges upon the assumption that our instrument is valid, our conclusion proves robust across different model specifications, samples, and sensitivity checks. Our findings for the Netherlands strengthen the conclusions for the US population as reported by Lusardi and Mitchell (2009) using a different regression strategy and different instruments (employing state variation in high school education mandates). This is an important observation given the institutional differences in both countries. For instance, apart from possible differences in the approach and attention devoted to economics education in school curricula, there is no Dutch equivalent of employer-based retirement seminars. More importantly, compared with the United States—where workers are historically responsible for a variety of retirement saving choices—Dutch workers face limited freedom of choice, have (too) high expected replacement rates, and perceive a very limited necessity to save for retirement beyond the mandatory private retirement savings. In both these settings, financial knowledge appears to be an important driver of retirement planning. Typically in the Netherlands, most of the retirement saving decisions are beyond employees’ control and the pension system is perceived as quite generous, and this might contribute to the low number of households (one in eight) claiming to have thought a lot about retirement. This raises the question of whether, despite of the mandatory savings system, the Dutch might be worse prepared for retirement. For self-employed individuals this might well be true, given that the proportion of self-employed individuals that spends a lot of time thinking about retirement in the Netherlands (15%), albeit being somewhat higher than for the average Dutch worker, is very low in comparison to the average worker in the United States. For Dutch employees, it is less clear-cut whether workers in the Netherlands or in the US are better prepared for retirement. On the one hand the mandatory savings system provides most workers with a firm and relatively high basis level for replacement rate upon retirement. On the other hand, the fact that many Dutch employees do not plan for retirement and display a lack of interest in and knowledge of pension issues makes them vulnerable to negative income surprises at retirement. Indeed, one-third of Dutch retirees, in retrospect, judge their pension savings through state pension and mandatory company retirement plans as somewhat low or much too low. Additional evidence suggests that retirement planning impacts the way households experience their retirement. Those who prepare for retirement tend to feel much more comfortable with how their retirement actually turns out (Lusardi, 2003). Our study is related to the findings by Bernheim, Garrett, and Maki (2001) and Bernheim and Garrett (2003), who show that financial education (either in high school or via workplace seminars) has a positive impact on savings. Nevertheless, the debate on how to increase the effectiveness of financial education and saving programs is ongoing (Lusardi, 2008). Our study contributes to the empirical evidence that shows that high levels of financial literacy often correlate with financial household behavior that is consistent with recommended practices for retirement planning (Hilgert et al., 2003 and Van Rooij, 2009). Moreover, it strengthens the case for investing in economics education of the young as this might be an important driver in increasing overall levels of financial knowledge. This is an important notion for policymakers who are concerned about whether household capabilities are adequate in an economic environment in which households are increasingly required to make intrinsically complicated financial decisions.