Optimal Financial Knowledge and Wealth Inequality

The research reported herein was performed pursuant to a grant from the U.S. Social Security Administration (SSA) to the Financial Literacy Center, funded under the Financial Literacy Research Consortium. The authors also acknowledge support provided by Netspar, the Pension Research Council and Boettner Center at The Wharton School of the University of Pennsylvania, and the RAND Corporation. Michaud acknowledges additional support from the Fond Québécois de Recherche sur la Société et la Culture (FQRSC - # 145848). We thank Hugh Hoikwang Kim and Yong Yu for excellent reasearch assistance, and we acknowledge the use of the RAND grid computing server to perform our calculations. Helpful comments were received from Marco Angrisani, Charlie Brown, Tabea Bucher-Koenen, Joao Cocco, Eric French, Dan Gottlieb, Michael Hurd, Jan Kabatek, Tullio Jappelli, Raimond Maurer, Alex Michaelides, Kim Peijnenburg, Karl Sholz, Hans-Martin von Gaudecker, Susann Rohwedder, Maarten van Rooij, Frank Stafford, Jeremy Tobacman, Chao Wei, and participants at seminars at the Carlson School of Management, CeRP, The George Washington University, McGill University, Netspar, Tilburg University, The Wharton School, the 2012 NBER Summer Institute, and the 2012 NBER-Oxford Saïd-CFS-EIEF Conference on Household Finance. We also thank Audrey Brown and Donna St. Louis for editorial assistance. Opinions and conclusions expressed herein are solely those of the authors and do not represent the opinions or policy of SSA, any agency of the Federal Government, the National Bureau of Economic Research, or any other institution with which the authors are affiliated.