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Financial Literacy, Financial Education, and Economic Outcomes


  • Justine S. Hastings

    () (Department of Economics, Brown University, Providence, Rhode Island 02912
    National Bureau of Economic Research, Cambridge, Massachusetts 02138)

  • Brigitte C. Madrian

    (National Bureau of Economic Research, Cambridge, Massachusetts 02138
    Harvard Kennedy School of Government, Cambridge, Massachusetts 02138)

  • William L. Skimmyhorn

    (Department of Social Sciences, United States Military Academy, West Point, New York 10996)


In this article, we review the literature on financial literacy, financial education, and consumer financial outcomes. We consider how financial literacy is measured in the current literature and examine how well the existing literature addresses whether financial education improves financial literacy or personal financial outcomes. We discuss the extent to which a competitive market provides incentives for firms to educate consumers or to offer products that facilitate informed choice. We review the literature on alternative policies to improve financial outcomes and compare the evidence with that on the efficacy and cost of financial education. Finally, we discuss directions for future research.

Suggested Citation

  • Justine S. Hastings & Brigitte C. Madrian & William L. Skimmyhorn, 2013. "Financial Literacy, Financial Education, and Economic Outcomes," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 347-373, May.
  • Handle: RePEc:anr:reveco:v:5:y:2013:p:347-373

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    References listed on IDEAS

    1. Christelis, Dimitris & Jappelli, Tullio & Padula, Mario, 2010. "Cognitive abilities and portfolio choice," European Economic Review, Elsevier, vol. 54(1), pages 18-38, January.
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    More about this item


    personal finance; household finance;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation


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