What Explains the Gender Gap in Financial Literacy? The Role of Household Decision Making.

Using newly collected data from the RAND American Life Panel, we examine potential explanations for the gender gap in financial literacy, including the role of marriage and who within a couple makes the financial decisions. Blinder-Oaxaca decomposition reveals the majority of the gender gap in financial literacy is not explained by differences in the characteristics of men and women-but rather differences in coefficients, or how literacy is produced. We find that financial decision making of couples is not centralized in one spouse although it is sensitive to the relative education level of spouses.

Unbanked status and use of alternative financial services among minority populations.

A large number of Americans do not have bank accounts (the 'unbanked') or rely on costly alternative financial services (AFS) such as payday loans (the 'underbanked'), with implications for wealth accumulation and retirement preparedness. Using primary data, we document large racial/ethnic differences in unbanked and in frequent AFS usage rates. We study the role of socio-economic status (SES), financial literacy, trust in financial institutions, networks, and time preferences in explaining these gaps. While these variables explain a large fraction of the white-minority gaps in unbanked status the same is not true for gaps in AFS use. A Blinder-Oaxaca decomposition confirms these patterns: gaps in unbanked status are mostly explained by differences in endowments across groups, for AFS gaps differences in returns to endowments have the largest explanatory power. Our findings suggest that, while related, unbanked and underbanked are distinct concepts with different underlying causes that may require different policy responses.

Gender differences in couples' division of childcare, work and mental health during COVID-19.

The current COVID-19 crisis, with its associated school and daycare closures as well as social-distancing requirements, has the potential to magnify gender differences both in terms of childcare arrangements within the household and at work. We use data from a nationally representative sample of the United States from the Understanding Coronavirus in America tracking survey to understand gender differences within households on the impact of the COVID-19 crisis. We study how fathers and mothers are coping with this crisis in terms of childcare provision, employment, working arrangements, and psychological distress levels. We find that women have carried a heavier load than men in the provision of childcare during the COVID-19 crisis, even while still working. Mothers' current working situations appear to have a limited influence on their provision of childcare. This division of childcare is, however, associated with a reduction in working hours and an increased probability of transitioning out of employment for working mothers. Finally, we observe a small but new gap in psychological distress that emerged between mothers and women without school-age children in the household in early April. This new gap appears to be driven by higher levels of psychological distress reported by mothers of elementary school-age and younger children.

Comparing Performance of Methods to Deal With Differential Attrition in Randomized Experimental Evaluations.

Background: In randomized controlled trials, attrition rates often differ by treatment status, jeopardizing causal inference. Inverse probability weighting methods and estimation of treatment effect bounds have been used to adjust for this bias. Objectives: We compare the performance of various methods within two samples, both generated through lottery-based randomization: one with considerable differential attrition and an augmented dataset with less problematic attrition. Research Design: We assess the performance of various correction methods within the dataset with problematic attrition. In addition, we conduct simulation analyses. Results: Within the more problematic dataset, we find the correction methods often performed poorly. Simulation analyses indicate that deviations from the underlying assumptions for bounding approaches damage the performance of estimated bounds. Conclusions: We recommend the verification of the underlying assumptions in attrition correction methods whenever possible and, when verification is not possible, using these methods with caution.

Validation of survey effort measures of grit and self-control in a sample of high school students.

Personality traits such as grit and self-control are important determinants of success in life outcomes. However, most measures of these traits, which rely on self-reports, might be biased when used for the purpose of evaluating education policies or interventions. Recent research has shown the potential of survey effort-in particular, item non-response and careless answering-as a proxy measure of these traits. The current investigation uses a dataset of high school seniors (N = 513) to investigate survey effort measures in relationship with teacher reports, performance task measures, high school academic outcomes, and college attendance. Our results show promise for use of survey effort as proxy measures of grit and self-control.

Does Financial Literacy Contribute to Food Security?

Food insecurity, not having consistent access to adequate food for active, healthy lives for all household members, is most common among low income households. However, income alone is not sufficient to explain who experiences food insecurity. This study investigates the relationship between financial literacy and food security. We find that low income households who exhibit financial literacy are less likely to experience food insecurity.

Disentangling Disadvantage: Can We Distinguish Good Teaching from Classroom Composition?

This paper investigates the use of teacher value-added estimates to assess the distribution of effective teaching across students of varying socioeconomic disadvantage in the presence of classroom composition effects. We examine, via simulations, how accurately commonly-used teacher-value added estimators recover the rank correlation between true and estimated teacher effects and a parameter representing the distribution of effective teaching. We consider various scenarios of teacher assignment, within-teacher variability in classroom composition, importance of classroom composition effects, and presence of student unobserved heterogeneity. No single model recovers without bias estimates of the distribution parameter in all the scenarios we consider. Models that rank teacher effectiveness most accurately do not necessarily recover distribution parameter estimates with less bias. Since true teacher sorting in real data is seldom known, we recommend that analysts incorporate contextual information into their decisions about model choice and we offer some guidance on how to do so.

Dimensions of Subjective Well-Being.

We use two waves of a population based survey (the RAND American Life Panel) to investigate the relations between various evaluative and experienced well-being measures based on the English Longitudinal Study of Aging, the Gallup Wellbeing Index, and a 12-item hedonic well-being module of the Health and Retirement Study. In a randomized set-up we administered several versions of the survey with different response scales. Using factor analysis, we find that all evaluative measures load on the same factor, but the positive and negative experienced affect measures load on different factors. We find evidence of an effect of response scales on both the estimated number of underlying factors and their relations with demographics. We conclude that finer response scales allowing more nuanced answers offer more reliability. The relation of evaluative and experienced measures with demographics are very different; perhaps the most striking aspect is the lack of a consistent relation of experienced well-being measures with income, while evaluative well-being is strongly positively related with income.

A Longitudinal Study of Well-being of Older Europeans: Does Retirement Matter?

We examine determinants of financial and subjective well-being, in particular poverty and depression, among older individuals in Europe. We do so using the 2004, 2006, and 2010 waves of the Survey of Health Ageing and Retirement in Europe and estimating dynamic panel data and binary choice transition models. We find a number of common effects across financial and subjective well-being. Unemployment, disabilities, serious health conditions, lower education, being female, and not being married increase the probability of poverty or depression. Conversely, healthy individuals, those with higher levels of education, males, and married individuals have higher probabilities of exiting poverty or depression. The effect of retirement is of special policy interest. It turns out to be crucial to control for endogeneity (i.e. the possibility of reverse causality) of retirement. If we don't control for endogeneity, retirement appears to increase both the risk of poverty and of depression. Once we control for endogeneity using instrumental variables, these negative effects disappear and point to weak evidence that retirement induced through eligibility for retirement pensions may be protective against poverty and depression.

Retirement effects on health in Europe.

What are the health impacts of retirement? As talk of raising retirement ages in pensions and social security schemes continues around the world, it is important to know both the costs and benefits for the individual, as well as the governments' budgets. In this paper we use the Survey of Health, Ageing and Retirement in Europe (SHARE) dataset to address this question in a multi-country setting. We use country-specific early and full retirement ages as instruments for retirement behavior. These statutory retirement ages clearly induce retirement, but are not related to an individual's health. Exploiting the discontinuities in retirement behavior across countries, we find significant evidence that retirement has a health-preserving effect on overall general health. Our estimates indicate that retirement leads to a 35 percent decrease in the probability of reporting to be in fair, bad, or very bad health, and an almost one standard deviation improvement in the health index. While the self-reported health seems to be a temporary impact, the health index indicates there are long-lasting health differences.