How childhood allowance affects financial literacy in adulthood: A gender perspective study from Japan

Abstract This study investigates the long-term associations between a childhood allowance and financial literacy, monetary attitudes, and time discounting preferences in adulthood, with a specific focus on gender differences, using survey data from Japan. Gender factor analyses were conducted to identify common factors in psychological attitudes toward money. Subsequently, using reduced-form estimation, we estimated the relationship between childhood allowance and these factors, as well as the time discounting preference and financial literacy by gender. Our findings reveal that regular monthly allowances are associated with good budgeting habits among males, whereas females receiving any form of allowance tend to have less-negative attitudes toward money. Furthermore, the relationship between a childhood allowance and time-discounting preferences varies by gender, with females being more affected by the allowance. Additionally, the impact of financial literacy differs between males and females depending on how the child allowance is received. Overall, this study underscores the importance of considering childhood financial experiences to understand financial behaviors and attitudes.