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  3. American Economic Review
  4. March 2022
  5. Fictional Money, Real Costs: Impacts of Financial Salience on Disadvantaged Students

Fictional Money, Real Costs: Impacts of Financial Salience on Disadvantaged Students

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Abstract

Disadvantaged students perform differentially worse when randomly given a financially salient mathematics exam. For students with socioeconomic indicators below the national median, a 10 percentage point increase in the share of monetary themed questions depresses exam performance by 0.026 standard deviations, about 6 percent of their performance gap. Using question-level data, I confirm the role of financial salience by comparing performance on monetary and highly similar non-monetary questions. Leveraging the randomized ordering of questions, I identify an effect on subsequent questions, providing evidence that the attention capture effects of poverty affect policy relevant outcomes outside of experimental settings.

Citation

Duquennois, Claire. 2022. "Fictional Money, Real Costs: Impacts of Financial Salience on Disadvantaged Students." American Economic Review, 112 (3): 798-826. DOI: 10.1257/aer.20201661

Additional Materials

JEL Classification

  • G53 Household Finance: Financial Literacy
  • I21 Analysis of Education
  • I24 Education and Inequality
  • I32 Measurement and Analysis of Poverty
  • J13 Fertility; Family Planning; Child Care; Children; Youth
  • O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration