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Financial Literacy and Investments in Higher Education

Author

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  • Fernando López

    (Universidad Alberto Hurtado)

Abstract

Using a rich data set from a large U.S. non-profit organization, I find that low income post-secondary students are poorly informed about three main financial aspects of their higher education: future income, financing costs and opportunity cost of being enrolled. This result holds for students who are academically talented, have been exposed to financial education (including a semester-long personal finance class) and relevant financial experiences. Furthermore, the first round of results of a randomized controlled trial (N=117) suggests that an hour-long financial education workshop on the main financial aspects of college increases students’ GPA by 0.2 points (p-value=0.15) and their ability to receive financial aid from the non-profit organization by 11.4 percentage points (p-value=0.25).

Suggested Citation

  • Fernando López, 2014. "Financial Literacy and Investments in Higher Education," ILADES-UAH Working Papers inv300, Universidad Alberto Hurtado/School of Economics and Business.
    • Handle: RePEc:ila:ilades:inv300
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    More about this item

    Keywords

    Financial Literacy; Financial Education; Financial Aid; Human Capital; Randomized Controlled Trial;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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