Poverty and Financial Literacy

Max Ehrenfreund, writing for Wonkblog, examines research presented at the 2016 American Economic Association’s annual meeting by Anuj Shah and collaborators showing that the the poor do better on tests of financial common sense:

If you spend all your time thinking about money, chances are, you’re going to get pretty good at thinking about money. Indeed, new research suggests that the poor — for whom concerns about cash are inescapable — are not as prone to certain financial mistakes often made by the affluent.

“The poor spend a lot more time on mundane, everyday expenses. They’re focused on money,” said Anuj Shah, a psychologist at the University of Chicago and one of the authors of the research, which was published last year and presented earlier this month at the American Economic Association’s annual meeting.


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