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Pension Pessimism in the Young Generation: Basics or Instincts to Blame?

Pension Pessimism in the Young Generation: Basics or Instincts to Blame? AbstractBackground: The area of pension expectations in Hungary is barely researched. However, the importance of adequate financial literacy and self-provision is becoming obvious at the economic, the decision-making, and the individual level.Objectives: Our research is conducted to investigate state pension expectations and certain aspects of financial literacy of the young generation, and to find a behavioral explanation for their pessimistic attitude.Methods/Approach: Using a 14-question questionnaire, we collected answers from Hungarian financially educated, young people. Two hypotheses were investigated by the Principal Component Analysis (PCA). Besides, a comparative analysis was conducted to connect the survey results with the ten instincts published by Hans Rosling in his book ‘Factfulness’.Results: The outcomes are in harmony with prior expectations, i.e. i) students in finance major are aware of the connection between a longer working period and a higher retirement income; and ii) despite the unisex pension scheme there are gender differences in the expected pension age. In the comparative analysis with ‘Factfulness’, we identified five instincts that lie behind the general pessimism of respondents.Conclusions: State pension expectations of the Hungarian young generation are overly pessimistic, the same attitude being found in international literature, as well. Pessimistic expectations can be explained using some of the ten instincts by Rosling. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Business Systems Research Journal de Gruyter

Pension Pessimism in the Young Generation: Basics or Instincts to Blame?

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Publisher
de Gruyter
Copyright
© 2020 Erzsébet Kovács et al., published by Sciendo
ISSN
1847-9375
eISSN
1847-9375
DOI
10.2478/bsrj-2020-0019
Publisher site
See Article on Publisher Site

Abstract

AbstractBackground: The area of pension expectations in Hungary is barely researched. However, the importance of adequate financial literacy and self-provision is becoming obvious at the economic, the decision-making, and the individual level.Objectives: Our research is conducted to investigate state pension expectations and certain aspects of financial literacy of the young generation, and to find a behavioral explanation for their pessimistic attitude.Methods/Approach: Using a 14-question questionnaire, we collected answers from Hungarian financially educated, young people. Two hypotheses were investigated by the Principal Component Analysis (PCA). Besides, a comparative analysis was conducted to connect the survey results with the ten instincts published by Hans Rosling in his book ‘Factfulness’.Results: The outcomes are in harmony with prior expectations, i.e. i) students in finance major are aware of the connection between a longer working period and a higher retirement income; and ii) despite the unisex pension scheme there are gender differences in the expected pension age. In the comparative analysis with ‘Factfulness’, we identified five instincts that lie behind the general pessimism of respondents.Conclusions: State pension expectations of the Hungarian young generation are overly pessimistic, the same attitude being found in international literature, as well. Pessimistic expectations can be explained using some of the ten instincts by Rosling.

Journal

Business Systems Research Journalde Gruyter

Published: Oct 1, 2020

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