How Do Financial Literacy and Financial Behavior Vary by State?
November 17, 2011
The November 2011 EBRI Notes includes a study that uses relatively new data to show the difference in financial literacy and financial behavior across states. After controlling for the effect of individual demographic characteristics, most bottom-ranked states have a statistically significant effect on their residents’ financial literacy and almost all states have a statistically significant effect on their residents’ financial behavior.
This suggests that there might be something going on at the state level whereby individual financial literacy and financial behavior are being shaped not only by individual demographic characteristics but also by the state in which people live.
Top-Ranked States: New Hampshire and Alaska top the financial literacy and the financial behavior rankings, respectively. Minnesota, Idaho, Washington, Colorado, Wisconsin, Utah, and Maryland also appear in the top 15 of both rankings.
Bottom-Ranked States: Louisiana and West Virginia are at the bottom of the financial literacy and the financial behavior rankings, respectively. Mississippi, Arkansas, Tennessee, Alabama, Ohio, Kentucky, Texas, and Indiana also appear in the bottom 15 of both rankings.
The press release is online here.
The full report is online here. A chart showing state rankings is on pg. 14 of the report.