Understanding later-life financial literacy in the family, community, and social environment using the socio-ecological framework

Financial literacy is pivotal to economic well-being in later life as it forms the basis of sound financial decision-making. Extant research on financial literacy demonstrates the association between individual characteristics and financial literacy and the effect of financial literacy on issues related to economic well-being and retirement preparedness. Yet, very little is known about the ways in which contextual factors shape financial literacy at the individual level. This lack of evidence of contextual influences limits our understanding of the mechanisms through which contextual conditions shape the social environment in ways that impact financial literacy. To better understand the extent to which broader social contexts shape financial literacy in later life, this dissertation examines the extent to which late-life financial literacy is associated with features of the social environment in the family, community, and the broader society, above and beyond individual characteristics that are already known to shape financial literacy. This dissertation includes three studies. Study 1 found that respondents with better location-specific income security were less likely to experience hardship and that financial literacy strengthened the negative association between location-specific income security and hardship. Study 2 found that husbands’ education was positively associated with wives’ basic financial literacy, net of own education and characteristics, but wives’ education was not associated with husbands’ financial literacy. Study 2 also found that the association between husbands’ education and wives’ financial literacy was stronger than the association between wives’ education and husbands’ financial literacy. Study 3 found that state-level poverty prevalence was negatively associated with individual financial literacy while state-level Internet penetration was positively associated with individual financial literacy, over and above individual characteristics known to impact financial literacy. In conclusion, this dissertation expanded the conceptualization of financial literacy by situating financial literacy within the broader socioeconomic environment to examine the association between aspects of the social environment and later-life financial literacy—expanding beyond individual human capital and characteristics. Findings from this dissertation suggest that efforts to enhance economic well-being and financial literacy among older adults would benefit from approaches that provide for targeted interventions that take into account the specific community, family, and societal context in which individuals reside. Implications of this work for research, policy and practice are discussed in the concluding chapter