<abstract xmlns="http://www.w3.org/1999/xhtml">Background: The area of pension expectations in Hungary is barely researched. However, the importance of adequate financial literacy and self-provision is becoming obvious at the economic, the decision-making, and the individual level.Objectives: Our research is conducted to investigate state pension expectations and certain aspects of financial literacy of the young generation, and to find a behavioral explanation for their pessimistic attitude.Methods/Approach: Using a 14-question questionnaire, we collected answers from Hungarian financially educated, young people. Two hypotheses were investigated by the Principal Component Analysis (PCA). Besides, a comparative analysis was conducted to connect the survey results with the ten instincts published by Hans Rosling in his book ‘Factfulness’.Results: The outcomes are in harmony with prior expectations, i.e. i) students in finance major are aware of the connection between a longer working period and a higher retirement income; and ii) despite the unisex pension scheme there are gender differences in the expected pension age. In the comparative analysis with ‘Factfulness’, we identified five instincts that lie behind the general pessimism of respondents.Conclusions: State pension expectations of the Hungarian young generation are overly pessimistic, the same attitude being found in international literature, as well. Pessimistic expectations can be explained using some of the ten instincts by Rosling.</abstract>

Background: The area of pension expectations in Hungary is barely researched. However, the importance of adequate financial literacy and self-provision is becoming obvious at the economic, the decision-making, and the individual level.Objectives: Our research is conducted to investigate state pension expectations and certain aspects of financial literacy of the young generation, and to find a behavioral explanation for their pessimistic attitude.Methods/Approach: Using a 14-question questionnaire, we collected answers from Hungarian financially educated, young people. Two hypotheses were investigated by the Principal Component Analysis (PCA). Besides, a comparative analysis was conducted to connect the survey results with the ten instincts published by Hans Rosling in his book ‘Factfulness’.Results: The outcomes are in harmony with prior expectations, i.e. i) students in finance major are aware of the connection between a longer working period and a higher retirement income; and ii) despite the unisex pension scheme there are gender differences in the expected pension age. In the comparative analysis with ‘Factfulness’, we identified five instincts that lie behind the general pessimism of respondents.Conclusions: State pension expectations of the Hungarian young generation are overly pessimistic, the same attitude being found in international literature, as well. Pessimistic expectations can be explained using some of the ten instincts by Rosling.

Pension Pessimism in the Young Generation: Basics or Instincts to Blame?

Business Systems Research Journal

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"Pension Pessimism in the Young Generation: Basics or Instincts to Blame?"}

Background: The area of pension expectations in Hungary is barely researched. However, the importance of adequate financial literacy and self-provision is...

Pension Pessimism in the Young Generation: Basics or Instincts to Blame?

Published Online: Oct 29, 2020

Page range: 117 - 131

Received: Jan 31, 2020

Accepted: Jul 06, 2020

DOI: https://doi.org/10.2478/bsrj-2020-0019

Keywords
retirement income, social security expectations, financial literacy

© 2020 Erzsébet Kovács et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Pension Pessimism in the Young Generation: Basics or Instincts to Blame?

Published Online: Oct 29, 2020

Page range: 117 - 131

Received: Jan 31, 2020

Accepted: Jul 06, 2020

DOI: https://doi.org/10.2478/bsrj-2020-0019

Keywordsretirement income, social security expectations, financial literacy

© 2020 Erzsébet Kovács et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
retirement income, social security expectations, financial literacy