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Alternative Measures of Noncognitive Skills and Their Effect on Retirement Preparation and Financial Capability
WP 2017-365
Gema Zamarro

  • Noncognitive skills and personality traits, such as grit, conscientiousness, and neuroticism are found to be significantly associated with the levels of financial capability and retirement preparation of adults in the Understanding America Study.
  • We find that alternative measures of these noncognitive skills based on self-reports as well as performance task measures, such as the degree of carelessness in responding to surveys, present significant associations with important financial outcomes, even after taking into account differences in cognitive ability and relevant sociodemographic information.
  • Our results highlight the importance of considering psychological factors when designing policies that aim to improve the level of financial capability and retirement preparation in the population.
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