Financial Literacy and Retirement Planning in Japan

Using micro data on Japanese households, I provide an overview of the level of financial literacy in Japan, analyze the determinants of financial literacy and link financial literacy to retirement planning. Overall, the level of financial literacy is low in Japan. Surprisingly, many Japanese responded that they did not know the answer in at least one question. In addition, I found that females, the young, and individuals with lower incomes and lower education levels are financially illiterate. Moreover, as expected, I found that financial literacy increases the probability of having a savings plan for retirement