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High School Curriculum and Financial Outcomes: The Impact of Mandated Personal Finance and Mathematics Courses

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  • Shawn Cole
  • Anna Paulson
  • Gauri Kartini Shastry

Abstract

Financial literacy and cognitive capabilities are convincingly linked to the quality of financial decision-making. Yet, there is little evidence that education intended to improve financial decision-making is successful. Using plausibly exogenous variation in exposure to state-mandated personal finance and mathematics high school courses, affecting millions of students, this paper answers the question “Can high school graduation requirements impact financial outcomes?” The answer is yes, although not via traditional personal finance courses, which we find have no effect on financial outcomes. Instead, we find additional mathematics training leads to greater financial market participation, investment income, and better credit management, including fewer foreclosures.

Suggested Citation

  • Shawn Cole & Anna Paulson & Gauri Kartini Shastry, 2016. "High School Curriculum and Financial Outcomes: The Impact of Mandated Personal Finance and Mathematics Courses," Journal of Human Resources, University of Wisconsin Press, vol. 51(3), pages 656-698.
  • Handle: RePEc:uwp:jhriss:v:51:y:2016:i:3:p:656-698
    Note: DOI: doi:10.3368/jhr.51.3.0514-6390R1
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    References listed on IDEAS

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    1. Lusardi, Annamaria & Mitchell, Olivia S., 2007. "Baby Boomer retirement security: The roles of planning, financial literacy, and housing wealth," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 205-224, January.
    2. Bruhn, Miriam & Lara Ibarra, Gabriel & McKenzie, David, 2013. "Why is voluntary financial education so unpopular ? Experimental evidence from Mexico," Policy Research Working Paper Series 6439, The World Bank.
    3. Esther Duflo & Emmanuel Saez, 2003. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 815-842.
    4. 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.
    5. William Skimmyhorn, 2016. "Assessing Financial Education: Evidence from Boot Camp," American Economic Journal: Economic Policy, American Economic Association, vol. 8(2), pages 322-343, May.
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    Cited by:

    1. repec:oup:wbecrv:v:31:y:2017:i:3:p:611-630. is not listed on IDEAS
    2. Brown, Alexandra & Collins, J. Michael & Schmeiser, Maximilian D. & Urban, Carly, 2014. "State Mandated Financial Education and the Credit Behavior of Young Adults," Finance and Economics Discussion Series 2014-68, Board of Governors of the Federal Reserve System (U.S.).
    3. Margaret Miller & Julia Reichelstein & Christian Salas & Bilal Zia, 2015. "Can You Help Someone Become Financially Capable? A Meta-Analysis of the Literature," World Bank Research Observer, World Bank Group, vol. 30(2), pages 220-246.
    4. Maria De Paola & Francesca Gioia & Fabio Piluso, 2017. "Does Reminding Of Behavioural Biases Increase Returns From Financial Trading? A Field Experiment," Working Papers 201705, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    5. Meta Brown & John Grigsby & Wilbert van der Klaauw & Jaya Wen & Basit Zafar, 2016. "Financial Education and the Debt Behavior of the Young," Review of Financial Studies, Society for Financial Studies, vol. 29(9), pages 2490-2522.
    6. Han Yu & Naci Mocan, 2018. "The Impact of High School Curriculum on Confidence, Academic Success, and Mental and Physical Well-Being of University Students," NBER Working Papers 24573, National Bureau of Economic Research, Inc.
    7. Philip W. S. Newall, 2016. "Downside financial risk is misunderstood," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 11(5), pages 416-423, September.
    8. Arus Kongrungchok, 2016. "The Effectiveness of Personal Financial Planning of Rubber Farmers in Thailand: Case Study of Suratthani Province," Proceedings of International Academic Conferences 4106729, International Institute of Social and Economic Sciences.
    9. 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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