Financial Education: Interventions and Outcomes
Friday, Jan. 3, 2020 10:15 AM - 12:15 PM (PDT)
- Chair: Cynthia Harter, Eastern Kentucky University
Impact of Adverse Childhood Experiences on Financial Security in Adulthood
AbstractResearch about the effectiveness of financial education shows mixed results in terms of both improved knowledge and changes in financial decision making. Studies have shown positive outcomes with projects that have been tailored to specific populations. As more states mandate financial education in schools, it is increasingly important to identify characteristics of a population that relate to the effectiveness of financial education. It is equally important to identify a measure that encompasses all of the critical components of financial literacy. As an alternative to measuring financial knowledge or behavior, the Consumer Personal Finance Bureau recommends using the broader definition of financial wellbeing as the desired outcome for financial literacy efforts. One element of this definition is financial security in the present, which is measured by having control over your own day-to-day, month-to-month finances. This study uses interdisciplinary analyses and behavioral health data to identify various factors that impact adult financial security. The Center for Disease Control’s Behavioral Risk Factor Surveillance System survey data are used in an ordered probit model to investigate the determinants of financial security with respect to housing and food for adult respondents. The study specifically identifies impacts of adverse childhood experiences on financial security in adulthood. Results can be used to inform K-12 educators who are implementing state mandates in financial literacy about the importance of addressing adverse childhood experiences when teaching financial education because this could potentially yield more effective outcomes.
The Effects of Financial Education Received in High School, College, and Employment on the Financial Behaviors of Young Adults
AbstractThis study investigates the effects of financial education received in high school, college, or employment (separately or in combination) on financial behaviors of young adults (ages 18-34) in the United States. It builds on previous research (Wagner and Walstad, Journal of Consumer Affairs, 2019) which used the 2015 National Financial Capability Study (NFCS) data with all adults (ages 18-65+) to analyze the effects of financial education on long-term financial behaviors (e.g., future-oriented and planning ones) and short- term financial behaviors (e.g., ones often learned from regular feedback and experience). The 2018 NFCS data are major improvement over the 2015 NFCS data because in addition to the type of financial education received, it has metrics on the hours of instruction and whether it was required. For this new study, we focus exclusively on two young adult cohorts for comparison purposes: one sample, ages 18- 24, and a second sample, ages 25-34. We also combine the two sample to report the overall results. In preparing this proposal, we analyzed different financial behaviors with 2018 NFCS data in a probit regression model with controls for the effects of financial education, financial literacy, and demographic variables. Our preliminary results show that financial education (by type, hours, or requirement) has positive and significant effects on long-term financial behaviors—future-oriented ones such making investments, saving for retirement, and insuring assets. By contrast, financial education has mixed effects on short-term financial behaviors—experience-oriented ones with regular feedback such as managing a checking or credit card account and paying bills. The findings are similar when each cohort is analyzed separately (18-24 or 25-34) or in combination (18-34). Further research will be conducted using a wider set of financial behaviors to expand the preliminary findings.
Financial Education in Schools: A Meta-Analysis of Experimental Studies
AbstractWe study the literature on school financial education programs for children and youth via a quantitative meta-analysis of 37 (quasi-) experiments. We find that financial education treatments have, on average, sizeable impacts on financial knowledge (+0.33 SD), similar to educational interventions in other domains. Additionally, we document smaller effects on financial behaviors among students (+0.07 SD). When restricting the sample to 18 randomized experiments average effect sizes are estimated to be about 0.15 SD units on financial knowledge and 0.07 SD units on financial behaviors. These results are robust irrespective of the metaanalytic method used and when accounting for publication bias. Subgroup analyses show the beneficial effect of more intensive treatments, albeit with decreasing marginal returns.
- A2 - Economic Education and Teaching of Economics