What Does Financial Literacy Training Teach Us?
AbstractThis paper uses a quasi natural experiment to explore how financial education changes savings, investment, and consumer behavior. We use data from a Junior Achievement Finance Park to measure the effect of a financial literacy program on students who are assigned fictitious life situations and asked to create household budgets for these roles. The treatment effects of the financial literacy program are strong. Students who experienced training were somewhat better at making current-cost/current-benefit tradeoff decisions (spending more today versus spending less today). But the tendency to try to save more today often led them to make poor choices when they faced tradeoffs between current-costs and future-benefits today (i.e., when spending more today is cheaper in present value terms). Most importantly, students who had attended training showed greater up-take of decision support that was offered in the park. This indicates that decision support and financial literacy training are complements, not substitutes.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16271.
Date of creation: Aug 2010
Date of revision:
Publication status: published as Bruce Ian Carlin & David T. Robinson, 2012. "What Does Financial Literacy Training Teach Us?," Journal of Economic Education, Taylor and Francis Journals, vol. 43(3), pages 235-247, July.
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Other versions of this item:
- A21 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Pre-college
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
- H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
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