Is Financial Literacy a Factor in Shaping Well-Being of Elderly? Evidence from Urban India

Kshipra Jain, University of Rajasthan

Despite prominent role of financial literacy as predictor of savings behavior and wealth accumulation, much attention has not been given to explore its linkages with wellbeing and only a few studies focused on developing countries. The present study aims to assess socioeconomic determinants of financial literacy and wellbeing; to explore the effect of financial literacy on wellbeing of elderly for urban India. The study is based on primary data collected from urban Rajasthan using standard tools of measuring financial literacy and wellbeing. Ordinary least square and Generalized Ordered logistic regression was used. The indices for financial literacy and wellbeing were computed using Principal Component Analysis (PCA) and Polychoric PCA. The study revealed a higher level of financial literacy among the educated and well off section. The analysis further revealed financial literacy as a significant predictor of material, physical, social, emotional and hence, overall wellbeing of elderly aged 50 years above.