wealth between a safe and a risky asset, and receive a pension when they retire. Financial literacy affects the excess return … consumption, investors simultaneously choose how much to save, the portfolio allocation, and the optimal investment in literacy …

We present an intertemporal consumption model of consumer investment in financial literacy. Consumers benefit from such … investment because their stock of financial literacy allows them to increase the returns on their wealth. Since literacy … depreciates over time and has a cost in terms of current consumption, the model determines an optimal investment in literacy. The …