STOCKHOLDING AND FINANCIAL LITERACY IN THE FRENCH POPULATION

Abstract

This paper investigates the link between financial literacy and stock market participation. We provide an assessment of the level of financial literacy in the French population using standard and original measures. Based on eight questions asked to individuals to assess their level of financial literacy, we construct two indices: basic financial requirements and financial culture. Regression results reveal strong impact of financial culture on the probability to hold stocks and weaker impact of basic financial requirements. Thereby, we contribute to the extensive literature intending to account for the stock market participation puzzle