ORIGINAL RESEARCH article
Front. Behav. Econ.
Sec. Behavioral Microfoundations
Financial literacy may not directly drive investment participation or retirement planning in Japan
Provisionally accepted
- 1Shiga University, Hikone, Japan
- 2The University of Osaka, Osaka, Japan
- 3Center for Advanced Intelligence Project, RIKEN, Tokyo, Japan
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Introduction: Japan's rapidly aging society and pension-related deficits highlight the importance of household financial asset formation. Despite policies such as the Nippon Individual Savings Account, Japanese households still allocate over half their portfolios to deposits. While financial literacy has been linked to retirement planning and investment participation, existing research is largely correlational. Method: This study uses individual-level data from the 2022 Financial Literacy Survey. We apply the Fast Causal Inference algorithm, which accommodates latent confounders, to examine causal relationships between financial literacy and financial activities, specifically investment participation and retirement planning. Results: Our findings indicate that increasing financial literacy may not directly boost engagement in financial investments or retirement planning in Japan, which underscores the necessity for alternative strategies to motivate financial activities among Japanese households. Discussion: This research offers valuable insights for policymakers focused on improving financial well-being by advancing the use of causal discovery algorithms in understanding financial behaviors.
Keywords: causal discovery, Fast Causal Inference, financial literacy, investment participation, Retirement planning
Received: 20 Oct 2025; Accepted: 04 Dec 2025.
Copyright: © 2025 Jiang and Shimizu. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Yi Jiang
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