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The impacts of mandatory financial education: Evidence from a randomized field study

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  • Collins, J. Michael

Abstract

Financial education is commonly assumed to affect knowledge and behavior, yet its impacts remain relatively untested. Very low-income families in a subsidized housing program were randomly assigned to a mandatory financial education program and tracked for 12 months. Financial education led to improvements in self-reported behaviors, but no measurable effects on savings or credit, except for participants in education expanding their use of credit, albeit with no evidence of problems in the study period. This study also illustrates the methodological issues that arise in social experiments with small samples, including non-compliance, attrition and self-report bias.

Suggested Citation

  • Collins, J. Michael, 2013. "The impacts of mandatory financial education: Evidence from a randomized field study," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 146-158.
  • Handle: RePEc:eee:jeborg:v:95:y:2013:i:c:p:146-158
    DOI: 10.1016/j.jebo.2012.08.011
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    References listed on IDEAS

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    Cited by:

    1. Huizingh, Eelko & Mulder, Machiel, 2014. "Effectiveness of regulatory interventions on firm behavior," Research Report 14011-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    2. 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.
    3. Brounen, Dirk & Koedijk, Kees G. & Pownall, Rachel A.J., 2016. "Household financial planning and savings behavior," Journal of International Money and Finance, Elsevier, vol. 69(C), pages 95-107.
    4. Silvia Helena Barcellos & Leandro S. Carvalho & James P. Smith & Joanne Yoong, 2016. "Financial Education Interventions Targeting Immigrants and Children of Immigrants: Results from a Randomized Control Trial," Journal of Consumer Affairs, Wiley Blackwell, vol. 50(2), pages 263-285, July.
    5. Lührmann, Melanie & Serra-Garcia, Marta & Winter, Joachim, 2015. "Teaching teenagers in finance: Does it work?," Journal of Banking & Finance, Elsevier, vol. 54(C), pages 160-174.
    6. repec:dgr:rugsom:14011-eef is not listed on IDEAS
    7. Beckmann, Elisabeth & Stix, Helmut, 2015. "Foreign currency borrowing and knowledge about exchange rate risk," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 1-16.
    8. Tsui-Yii Shih & Sheng-Chen Ke, 2014. "Determinates of financial behavior: insights into consumer money attitudes and financial literacy," Service Business, Springer;Pan-Pacific Business Association, vol. 8(2), pages 217-238, June.

    More about this item

    Keywords

    Financial education; Asset accumulation; Financial security;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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