Middle-aged couples with good numeracy skills are wealthier than those who aren't as good with numbers, according to a new study of married couples in the United States.
Middle-aged couples with good numeracy skills are wealthier than those who aren't as good with numbers, according to a new study of married couples in the United States.
Numeracy - the ability to reason with numbers and other mathematical concepts - is a skill that is typically learned in school. To look into the association of cognitive traits and, in particular, numeracy of both spouses on financial outcomes of the family, researchers analysed data from married couples, aged 50 years and older, in the U.S. Health and Retirement Survey. They examined several cognitive [thinking] skills and found that a simple test that checks a person's numeracy skills was a good predictor of who would be a better family financial decision maker. This study is one of the first to examine who makes these financial decisions for a household, how that selection is influenced by couple's personal attributes and the relative cognitive abilities of both wives and husbands.
It was found that couples in which both spouses correctly answered three numeracy-related questions had an average of $1.7 million in household wealth, compared with $200,000 for couples where neither spouse answered any questions correctly. As the numeracy score of each spouse rose, there was an increase in the percentage of stocks in the family's financial portfolio. In 62 percent of the households, the man was the financial decision maker. This was particularly true when the husband was older and more educated than his wife. Even when a husband scored zero in his numeracy test, there was a 50-50 chance he would be the financial decision maker in the home. Families in which the wrong person was chosen as the primary financial decision maker had lower total household wealth.
Researchers say the skills needed to make successful investment choices are among the most cognitively demanding that a family has to make, especially as they get older and assume greater control of decisions about their wealth, pensions and health care.
Numeracy - the ability to reason with numbers and other mathematical concepts - is a skill that is typically learned in school. To look into the association of cognitive traits and, in particular, numeracy of both spouses on financial outcomes of the family, researchers analysed data from married couples, aged 50 years and older, in the U.S. Health and Retirement Survey. They examined several cognitive [thinking] skills and found that a simple test that checks a person's numeracy skills was a good predictor of who would be a better family financial decision maker. This study is one of the first to examine who makes these financial decisions for a household, how that selection is influenced by couple's personal attributes and the relative cognitive abilities of both wives and husbands.
It was found that couples in which both spouses correctly answered three numeracy-related questions had an average of $1.7 million in household wealth, compared with $200,000 for couples where neither spouse answered any questions correctly. As the numeracy score of each spouse rose, there was an increase in the percentage of stocks in the family's financial portfolio. In 62 percent of the households, the man was the financial decision maker. This was particularly true when the husband was older and more educated than his wife. Even when a husband scored zero in his numeracy test, there was a 50-50 chance he would be the financial decision maker in the home. Families in which the wrong person was chosen as the primary financial decision maker had lower total household wealth.
Researchers say the skills needed to make successful investment choices are among the most cognitively demanding that a family has to make, especially as they get older and assume greater control of decisions about their wealth, pensions and health care.
COMMENT
DoctorNDTV is the one stop site for all your health needs providing the most credible health information, health news and tips with expert advice on healthy living, diet plans, informative videos etc. You can get the most relevant and accurate info you need about health problems like diabetes, cancer, pregnancy, HIV and AIDS, weight loss and many other lifestyle diseases. We have a panel of over 350 experts who help us develop content by giving their valuable inputs and bringing to us the latest in the world of healthcare.
