Schooling, numeracy and wealth accumulation: A study involving an agrarian population

  • Catalina Estrada‐Mejia Catalina Estrada‐Mejia
  • David P. Baker David P. Baker
  • Ellen Peters Ellen Peters
  • Marcel Zeelenberg Marcel Zeelenberg
  • Marieke de Vries Marieke de Vries
  • Nathan F. Dieckmann Nathan F. Dieckmann

Accumulating wealth is one of the main concerns for consumers. Higher education is widely associated with higher wealth, but the underlying reasons for this association remain unclear. Using data from a field study conducted with 218 adults in agrarian communities in Peru’s Andean highlands, we explored the extent to which education, non‐numeric fluid intelligence, crystallized intelligence, and numeracy skills were related to wealth. Wealth was measured using data on asset ownership (e.g., owning a fridge) and housing characteristics (e.g., toilet facilities). Structural equation modeling revealed that the level of schooling was associated with greater numeracy as well as greater non‐numeric fluid and crystallized intelligence; only greater numeracy was associated with greater wealth. Our findings are consistent with the idea that education is linked with financial outcomes, at least in part, through the enhancement of cognitive skills, particularly numeracy that then leads to greater wealth accumulation.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

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