Life Cycle Implications of Schooling on Financial Assets

Abstract

This research explores the impact of education on individuals’ involvement with financial assets such as savings, annuities/IRAs, and stocks in the United States throughout their lifetimes. Utilizing panel data and various identification strategies, the findings indicate that education leads to greater investment in these assets, although the extent varies depending on the individual’s life stage and level of education. The paper examines how higher incomes resulting from better education, improved financial behaviors, and an increased willingness to take risks due to educational attainment contribute to these outcomes. While all three factors are influential, the impact of education is moderated by variables such as parental wealth and inheritance. This research suggests that increasing education could help more people invest wisely and increase their financial stability. It provides insights into the relationship between education and financial management, highlighting potential avenues for enabling more individuals to benefit from financial assets.

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