Even well-educated Canadians demonstrate relatively low levels of financial literacy, according to a new paper published by the U.S. National Bureau of Economic Research (NBER).

The paper from a trio of academics — David Boisclair, Annamaria Lusardi, and Pierre-Carl Michaud — finds that only about 42% of respondents to a survey could correctly answer three simple questions about the fundamental financial concepts of compounding, inflation, and diversification. This is more or less in line with the findings of similar surveys in other countries, it notes. For example, while Canadians score somewhat better than Americans, they come off worse than Germans, in answering these kinds of basic questions, the paper notes.

The Canadian results also showed demographic patterns that are similar to what has been found in other countries, the paper notes, in that young respondents, older respondents, women, minorities, and those with less schooling tend to score worse.

“It is also lower in Quebec and Atlantic provinces and, in particular, low among those speaking French in Quebec. However, these differences seem mostly due to differences in educational attainment among regions and language groups,” it notes.

Even so, the report indicates that relatively well-educated Canadians don’t score that well. “Financial literacy increases with education, but even among those with high levels of education, for example college-educated respondents, only 60% could answer all three questions correctly,” it says.

Moreover, the paper says that this lack of financial literacy should be important to the ongoing policy debate over retirement savings reform in Canada. “Retirement planning is strongly associated with financial literacy. This result has been found in many countries and the estimates in Canada are similar to those of other countries,” it says.

“This is relevant in the Canadian context because of the relatively low level of financial literacy, even among the more fortunate Canadians (i.e., those with higher education and income), who may need to rely more and more on voluntary savings programs to fund their accustomed level of consumption in retirement,” it concludes.