Source: Federal Reserve Bank of Cleveland
News Release: November 17, 2010
The Federal Reserve Bank of Cleveland reports that its latest estimate of 10-year expected inflation is 1.50 percent. In other words, the public currently expects the inflation rate to be less than 2 percent on average over the next decade.
Source: Alfred P. Sloan Foundation/Focus on Workplace Flexibility
Family Change and Time Allocation in American Families
Suzanne M. Bianchi, UCLA
Abstract
In this paper, I briefly discuss family demographic changes. Then I use the American Time Use Survey (ATUS) and the historical time diary studies in the U.S. to document trends in parents’ time spent in paid work, housework and childcare. I also describe the activities parents forego in order to meet work and family demands. Finally, I discuss time devoted to adult care and help given to adult children, elderly parents, and friends later in the life course.
Source: Proceedings of the National Academy of Sciences
High income improves evaluation of life but not emotional well-being
Daniel Kahneman and Angus Deaton
Recent research has begun to distinguish two aspects of subjective well-being. Emotional well-being refers to the emotional quality of an individual's everyday experience—the frequency and intensity of experiences of joy, stress, sadness, anger, and affection that make one's life pleasant or unpleasant. Life evaluation refers to the thoughts that people have about their life when they think about it. We raise the question of whether money buys happiness, separately for these two aspects of well-being. We report an analysis of more than 450,000 responses to the Gallup-Healthways Well-Being Index, a daily survey of 1,000 US residents conducted by the Gallup Organization. We find that emotional well-being (measured by questions about emotional experiences yesterday) and life evaluation (measured by Cantril's Self-Anchoring Scale) have different correlates. Income and education are more closely related to life evaluation, but health, care giving, loneliness, and smoking are relatively stronger predictors of daily emotions. When plotted against log income, life evaluation rises steadily. Emotional well-being also rises with log income, but there is no further progress beyond an annual income of ?$75,000. Low income exacerbates the emotional pain associated with such misfortunes as divorce, ill health, and being alone. We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being.
Source: MetLife
A few key findings in the study:
Source: RAND
Federal Financial and Economic Literacy Education Programs, 2009
By: Angela A. Hung, Kata Mihaly, Joanne K. Yoong
Financial literacy — the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being — is becoming more and more important as individuals and families become increasingly responsible for their own long-term financial well-being. Financial and economic literacy education programs have been shown to increase financial literacy and capability. Many federal agencies and departments have long-standing financial education programs, and, in recent years, steps have been taken to increase coordination of such efforts. In late 2009, a survey was conducted of 21 federal agencies, who reported offering a total of 56 financial and economic literacy education programs. In this report, the authors analyze the survey data, describing each program's purpose, content, delivery formats, target audience, and evaluation goals and method. The authors conclude with recommendations for future evaluations, emphasizing the need for a standardized definition of what constitutes a financial and economic literacy education program and for a standardized method of evaluating such programs across agencies.
Source: GAO
Consumer Finance: Factors Affecting the Financial Literacy of Individuals with Limited English Proficiency
GAO-10-518 May 21, 2010
Highlights Page (PDF) Full Report (PDF, 31 pages) Accessible Text
Summary
According to Census data, more than 12 million adults in the United States report they do not speak English well or at all. Proficiency in reading, writing, speaking, and understanding the English language appears to be linked to multiple dimensions of adult life in the United States, including financial literacy--the ability to make informed judgments and take effective actions regarding the current and future use and management of money. The Credit Card Accountability, Responsibility and Disclosure Act of 2009 mandated GAO to examine the relationship between fluency in the English language and financial literacy. Responding to this mandate, this report examines the extent, if any, to which individuals with limited English proficiency are impeded in their financial literacy and conduct of financial affairs. To address this objective, GAO conducted a literature review of relevant studies, reports, and surveys, and conducted interviews at federal, nonprofit, and private entities that address financial literacy issues and serve people with limited English proficiency. GAO also conducted a series of focus groups with consumers and with staff at community and financial organizations. GAO makes no recommendations in this report.
Source: Brookings Institution
The Income Rollercoaster: Rising Income Volatility and its Implications
By Karen Dynan
Millions of U.S. households have suffered devastating income disruptions as a result of the recent economic downturn. As of late 2009, eight million jobs had been lost to the recession, and one in ten workers was out of work, putting the unemployment rate at its highest level since the early 1980s. Although a variety of indicators suggest that the recession is now over, most analysts foresee a slow and gradual economic recovery and consequently a long, uphill climb back to full employment. Thus, it may be a number of years before the incomes of many families are back to normal. Policymakers have already taken some steps to support these families and stimulate job creation, and they continue to deliberate about what additional steps are still needed.
Read more.
Source: Bureau of Labor Statistics
The labor market in 2009:recession drags on
In 2009, the unemployment rate reached double digits, the employment-population ratio fell sharply, and the numbers o unemployed, discouraged workers, and involuntary part-timers rose.
Federal Employee Benefits and Same-Sex Partnerships (PDF; 281 KB)
Source: Congressional Research Service (via OpenCRS)
The federal government provides a variety of benefits to its 8 million employees and annuitants. Among these benefits are health insurance; enhanced dental and vision benefits; survivor benefits; retirement and disability benefits; family, medical, and emergency leave; and reimbursement of relocation costs. Pursuant to Title 5 U.S.C. Chapters 89, 89A, 89B and other statutes, millions of federal employees may extend these benefits to their spouses and children. An estimated 34,000 federal employees are in same-sex relationships, including state-recognized marriages, civil unions, or domestic partnerships.
From FINRA press release:
The FINRA Investor Education Foundation today released survey results that measure the financial capabilities of American adults and reveal in detail how Americans save, borrow and plan for their financial future. The National Financial Capability Survey, the first of its kind in the United States, was developed in consultation with the U.S. Department of the Treasury and the President's Advisory Council on Financial Literacy. In an event today at the U.S. Treasury, U.S. Secretary of the Treasury Tim Geithner, U.S. Secretary of Education Arne Duncan and FINRA CEO and FINRA Foundation Chairman Rick Ketchum all met with financial literacy and community leaders as well local high school students to announce the results.
The survey found that:
- only 41 percent of parents have set aside money for their children's college education;
- the majority of Americans do not have a "rainy day" fund for unanticipated financial emergencies and are not adequately preparing for their children's college education and their own retirement;
- more than one in five survey respondents use high-cost, alternative borrowing methods, such as payday loans or pawn shops; and
- fewer than half (46 percent) of those surveyed correctly answered two basic questions about how interest rates and inflation work.
The Devil Wears Prada? Effects of Exposure to Luxury Goods on Cognition and Decision Making
Published:
November 25, 2009Paper Released:
November 2009Authors:
Roy Y.J. Chua and Xi ZouExecutive Summary:
Gandhi once wrote that "a certain degree of physical harmony and comfort is necessary, but above a certain level it becomes a hindrance instead of a help." This observation raises interesting questions for psychologists regarding the effects of luxury. What psychological consequences do luxury goods have on people? In this paper, the authors argue that luxury goods can activate the concept of self-interest and affect subsequent cognition. The argument involves two key premises: Luxury is intrinsically linked to self-interest, and exposure to luxury can activate related mental representations affecting cognition and decision-making. Two experiments showed that exposure to luxury led people to think more about themselves than others. Key concepts include:
- Luxury does not necessarily induce people to be "nasty" toward others but rather causes them to be less concerned about or considerate toward others.
- Experiment 1 showed that when primed with luxury, people are more likely to endorse self-interested business decisions (profit maximization), even at the expense of others.
- Experiment 2 further demonstrated that exposure to luxury is likely to activate self-interest but not the tendency to harm others.
- Exposure to luxury goods may activate a social norm that it is appropriate to pursue interests beyond a basic comfort level, even at the expense of others. It may be this activated social norm that affects people's judgment and decision-making.
- Alternatively, exposure to luxury may directly increase people's personal desire, causing them to focus on their own benefits such as prioritizing profits over social responsibilities.
FINRA has published the initial results from a comprehensive survey of how Americans manage their finances. Additional data will be forthcoming.
The National Financial Capability Study established a baseline measure of the ability of Americans to manage their money, benchmarking four key indicators of financial capability and evaluating how these indicators vary with underlying demographic, behavioral, attitudinal and financial literacy characteristics.
According to the National Association of Colleges and Employers, the starting salaries of college grads are down 1.2 percent this year and salary offers are down 20 percent. While expected, it recently runs counter to the usual annual increase in starting salaries.
Wall Street Journal Launches FINS.com - Career Site for Financial Professionals
NEW YORK ( July 14, 2009) — The Wall Street Journal has launched a new career site - FINS.com - a stand-alone, online resource specifically targeting financial professionals and the finance market. The site covers all major financial sectors with associated jobs and news, in-depth research on companies, and daily columns offering advice and career insight, with the credibility and authority of The Wall Street Journal.
Free to users, FINS.com is a daily destination for both active job seekers and those in the finance industry who want to keep abreast of career-related dynamics in the market. Recruiters and employers have the ability to reach a targeted, high-quality audience through display ads, candidate search and job postings. FINS.com is part of The Wall Street Journal Digital Network, which comprises the flagship WSJ.com, MarketWatch.com, Barrons.com and AllThingsD.com.
From Website
The new program will include coverage of tuition and fees, an improved basic allowance for housing, a $1,000 stipend for books or the opportunity to transfer these benefits to a dependent. Also, service members will not have to pay into the Post 9/11 GI Bill, which was required to receive the Montgomery GI Bill. Individuals who paid the $1,200 for the MGIB are eligible for the Post 9/11 GI Bill and will receive their money back upon depletion of the 36 months of benefits.
This is the basic finding of a recent PEW Foundation study examining upward mobility among the poor. The report examines the benefits and costs of a college education and presents an overview of government funding programs.
See Misperceptions of Cost, Complexity of Aid System, Keep Low-Income Students Out of College
Fringe benefits currently account for about 30 percent of total compensation. Because these benefits are typically tax advantaged they have an even larger impact on our standard of living. A recent report by the Bureau of Labor Statistics highlights the recent growth in employer provided fringe benefits.
See: Beyond Basic Benefits: Employee Access to Other Types of Benefits, 1979-2008 by John E. Buckley, Bureau of Labor Statistics
From UMaine website:
ORONO — The University of Maine Financial Education Program, in collaboration with the UMaine School of Economics, will offer a series of workshops related to household financial management. The set of five workshops will run continuously through the summer in a rotating cycle that starts Thursday, May 21. All workshops are free and open to the public.
From Press Release April 29, 2009
School-Based Bank Savings Programs: Bringing Financial Education to Students
WASHINGTON — The Office of the Comptroller of the Currency (OCC) today published a Community Developments Insights report that discusses how banks can set up school-based bank savings programs to help students learn about the importance of saving and managing their personal finances.
Comptroller of the Currency John C. Dugan stated, “As a parent, one area of financial literacy that is especially important to me is that our children learn how to make the right financial choices before they leave home. These school-based bank programs are productive collaborations between banks and schools that share a mutual interest in providing financial education to students eager to learn.”
The OCC encourages bank participation in financial literacy initiatives such as school-based bank savings programs. Students involved in these programs receive “hands-on” learning, while banks gain added visibility in the communities they serve.
This Insights report explains how the various school-based bank savings programs operate and describes the potential risks and benefits, including positive consideration under the Community Reinvestment Act, that banks participating in these programs may receive.
This Insights report can be accessed on the OCC’s web site at: http://www.occ.gov/cdd/Insights-Schoolbasedbank.pdf. Contact information for the OCC’s Community Affairs Officers is available at: http://www.occ.gov/cdd/contacts.htm.
Highlights from the Census Press Release for the new issue of Educational Attainment in the United States: 2008
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