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Increasing Youth Financial Capability: An Evaluation of the MyPath Savings Initiative

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  • VERNON LOKE
  • LAURA CHOI
  • MARGARET LIBBY

Abstract

type="main" xml:id="joca12066-abs-0001"> Although there has been mixed evidence from research on the efficacy of financial education efforts for youth, there is an emerging consensus that focusing on financial capability may be a more effective approach. This article examines the impact of the MyPath Savings pilot on 275 economically disadvantaged youth participating in a youth development and employment program. MyPath Savings targets youth earning their first paycheck—a critical “teachable moment” to promote savings and connect youth with mainstream financial products. The results indicate that MyPath Savings is highly relevant to participants' needs. In addition, youth experienced significant increases in financial knowledge, financial self-efficacy, and the frequency with which positive financial behaviors were carried out. Participants also saved an average of $507 through MyPath Savings. Gains in financial capability were mostly independent of the youths' race, gender, household income, and public benefits receipt. Possible factors for the promising results are discussed.

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  • Vernon Loke & Laura Choi & Margaret Libby, 2015. "Increasing Youth Financial Capability: An Evaluation of the MyPath Savings Initiative," Journal of Consumer Affairs, Wiley Blackwell, vol. 49(1), pages 97-126, March.
    • Handle: RePEc:bla:jconsa:v:49:y:2015:i:1:p:97-126
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    File URL: http://hdl.handle.net/10.1111/joca.12066
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    2. Susnaningsih Muat & Nurul Shahnaz Mahdzan & Mohd Edil Abd Sukor, 2024. "What shapes the financial capabilities of young adults in the US and Asia-Pacific region? A systematic literature review," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.
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    6. Elise Frølich Furrebøe & Ellen Katrine Nyhus & Andrew Musau, 2023. "Gender differences in recollections of economic socialization, financial self‐efficacy, and financial literacy," Journal of Consumer Affairs, Wiley Blackwell, vol. 57(1), pages 69-91, January.
    7. Rodríguez, Catherine & Saavedra, Juan E., 2019. "The persistent effects of youth savings reminders: Experimental evidence from text-message campaigns in Colombia," Journal of Development Economics, Elsevier, vol. 139(C), pages 135-156.
    8. Hoffmann, Arvid O.I. & Plotkina, Daria, 2020. "Why and when does financial information affect retirement planning intentions and which consumers are more likely to act on them?," Journal of Business Research, Elsevier, vol. 117(C), pages 411-431.
    9. Moreno-Herrero, Dolores & Salas-Velasco, Manuel & Sánchez-Campillo, José, 2018. "Factors that influence the level of financial literacy among young people: The role of parental engagement and students' experiences with money matters," Children and Youth Services Review, Elsevier, vol. 95(C), pages 334-351.
    10. Angel, Stefan, 2018. "Smart tools? A randomized controlled trial on the impact of three different media tools on personal finance," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 74(C), pages 104-111.
    11. Sheza Riaz & Hadi Hassan Khan & Bilal Sarwar & Wahab Ahmed & Noor Muhammad & Sajjida Reza & Sheikh Muhammad Nabeel Ul Haq, 2022. "Influence of Financial Social Agents and Attitude Toward Money on Financial Literacy: The Mediating Role of Financial Self-Efficacy and Moderating Role of Mindfulness," SAGE Open, , vol. 12(3), pages 21582440221, August.
    12. Julie Birkenmaier & David Rothwell & Mary Agar, 2022. "How is Consumer Financial Capability Measured?," Journal of Family and Economic Issues, Springer, vol. 43(4), pages 654-666, December.
    13. Sana Rashid & Zulfqar Ahmed Bowra & Abid Hussain, 2022. "An Empirical Investigation Of Financial Inclusion On Financial Wellbeing Of Working Women: A Mediating Role Of Financial Capability," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(1), pages 14-23, March.
    14. Laura Choi & Lauren Larin & Margaret Libby & Vernon Loke, 2016. "Boosting the power of youth paychecks: integrating financial capability into youth employment programs," Community Development Working Paper 2016-3, Federal Reserve Bank of San Francisco.
    15. Fu, Jonathan, 2020. "Ability or opportunity to act: What shapes financial well-being?," World Development, Elsevier, vol. 128(C).
    16. Arvid O. I. Hoffmann & Daria Plotkina, 2021. "Let your past define your future? How recalling successful financial experiences can increase beliefs of self‐efficacy in financial planning," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(3), pages 847-871, September.
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