The P-Fin Index: Demographic Variations

Financial literacy varies across demographic groups. Figure 5 shows the average percentage of P-Fin Index questions answered correctly by demographics; Figure 6 presents the distribution of correct answers within each demographic group. These findings are overall consistent with variations identified in previous studies, as well as the 2017 P-Fin Index findings.


•    Financial literacy among men exceeds that among women. There is also a significant difference of 9 percentage points in the share of men and women demonstrating a relatively high level of personal finance knowledge, i.e., answering more than 75% of P-Fin Index questions correctly. 


•    Personal finance knowledge is lower among those under age 45 than those ages 45 and older. The former answers a much lower percentage of P-Fin Index questions correctly on average and they are more likely to have a relatively low level of knowledge and understanding, i.e., answering 25% or fewer of P-Fin Index questions correctly. 


•    Personal finance knowledge tends to increase as household income increases. In particular, there is a sizeable difference in financial literacy between those with $50,000 or more in household income compared with those whose household income is less than $50,000.


•    Financial literacy varies significantly with employment status. Those not employed have markedly less personal finance knowledge than those employed and those retired; the percentage of index questions answered correctly by not-employed respondents is far lower.

P Fin Index Figure 5
P-Fin 2018 Figure 6