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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.

Suggested Citation

  • 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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    References listed on IDEAS

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    1. Ian Hathaway & Sameer Khatiwada, 2008. "Do financial education programs work?," Working Papers (Old Series) 0803, Federal Reserve Bank of Cleveland.
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    4. Michael Sherraden & Mark Schreiner & Sondra Beverly, 2003. "Income, Institutions, and Saving Performance in Individual Development Accounts," Economic Development Quarterly, , vol. 17(1), pages 95-112, February.
    5. Melissa Schettini Kearney & Peter Tufano & Jonathan Guryan & Erik Hurst, 2010. "Making Savers Winners: An Overview of Prize-Linked Savings Products," NBER Working Papers 16433, National Bureau of Economic Research, Inc.
    6. Patrick J. Bayer & B. Douglas Bernheim & John Karl Scholz, 2009. "The Effects Of Financial Education In The Workplace: Evidence From A Survey Of Employers," Economic Inquiry, Western Economic Association International, vol. 47(4), pages 605-624, October.
    7. Han, Chang-Keun & Sherraden, Michael, 2009. "Do institutions really matter for saving among low-income households? A comparative approach," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(3), pages 475-483, June.
    8. Margaret Sherraden & Lissa Johnson & Baorong Guo & William Elliott, 2011. "Financial Capability in Children: Effects of Participation in a School-Based Financial Education and Savings Program," Journal of Family and Economic Issues, Springer, vol. 32(3), pages 385-399, September.
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    1. repec:oup:wbecrv:v:31:y:2017:i:3:p:611-630. is not listed on IDEAS
    2. repec:eee:cysrev:v:93:y:2018:i:c:p:178-185 is not listed on IDEAS
    3. repec:eee:cysrev:v:95:y:2018:i:c:p:334-351 is not listed on IDEAS
    4. repec:eee:soceco:v:74:y:2018:i:c:p:104-111 is not listed on IDEAS
    5. Tim Kaiser & Lukas Menkhoff, 2017. "Does Financial Education Impact Financial Literacy and Financial Behavior, and If So, When?," World Bank Economic Review, World Bank Group, vol. 31(3), pages 611-630.

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