Determinants of Financial Literacy among German Students: An Empirical Analysis

Financial literacy is very important for social participation. This paper presents an empirical evaluation of the determinants of financial literacy among students at a German university. An additional goal is the identification of gender differences in respect to financial literacy. The evaluation is based on the definition and surveys of financial literacy developed by the OECD, (A. Lusardi & Mitchell, 2014) and (Chen & Volpe, 1998) and the analysis of the "Big Three" questions. The results suggest a rather low level of financial literacy among female students. Additional factors such as a very good mathematics grade and logical thinking have a significantly positive impact on financial literacy. Students in economics are more likely to answer the "Big Three" questions correctly. This finding supports the hypothesis that education in economics helps to acquire knowledge of financial instruments and financial application.