Participation to Pension Funds in Italy: The Role of Expectations and Financial Literacy

This paper seeks to assess the role of expectations on pension income and financial literacy in the decision of joining a pension fund, using a large household survey for Italy. The results confirm past evidence on the role of income and education, and find a strong role played by financial literacy. Forward looking thinking about the sources of income after retirement and forming not overly optimistic expectations on replacement rate are tightly related to enrollment. Finally participation to pension funds is found to depend strongly on the industry of employment. The results provide further evidence for the role of public powers in enhancing participation by providing information and financial education.