IDEAS home Printed from https://ideas.repec.org/p/fip/fedlwp/103095.html

Prior Knowledge, Module Design, and Student Dropout in Online K-12 Education

Author

Abstract

We examine student dropout in online K-12 education coursework using administrative data for 442,000 students, 64 economics and personal finance modules, and 2.1 million module assignments between 2014 and 2025. We find that module length, prior knowledge, embedded formative assessments, and school district demographics independently predict whether students complete assigned modules. Each additional page is associated with a 0.24-percentage-point decrease in completion probability, but this relationship is 30 percent weaker for students with above-median prior knowledge. Embedded knowledge checks amplify the negative effect of module length: the page effect more than doubles in modules containing these assessments. Dropout is elevated 33 percent above expected on pages immediately before knowledge checks. Districts with higher minority enrollment exhibit lower completion even after accounting for per-pupil expenditure and staffing. Survival analysis reveals that dropout risk is highest in the first 10 percent of module progress and generally declines thereafter, suggesting that early engagement is critical. Apparent differences between personal finance and economics modules disappear within schools, indicating institutional sorting rather than subject difficulty. These findings provide actionable guidance for instructional designers developing online educational content.

Suggested Citation

  • Manu García & Diego Mendez-Carbajo, 2026. "Prior Knowledge, Module Design, and Student Dropout in Online K-12 Education," Working Papers 2026-008, Federal Reserve Bank of St. Louis.
  • Handle: RePEc:fip:fedlwp:103095
    DOI: 10.20955/wp.2026.008
    as

    Download full text from publisher

    File URL: https://doi.org/10.20955/wp.2026.008
    File Function: Full text
    Download Restriction: no

    File URL: https://libkey.io/10.20955/wp.2026.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Hill, Andrew J. & LoPalo, Melissa, 2024. "The effects of online vs in-class testing in moderate-stakes college environments," Economics of Education Review, Elsevier, vol. 98(C).
    2. Diego Mendez-Carbajo & Lucy C. Malakar, 2020. "Flipping the classroom with econlowdown.org," The Journal of Economic Education, Taylor & Francis Journals, vol. 51(1), pages 95-102, January.
    3. Damgaard, Mette Trier & Nielsen, Helena Skyt, 2018. "Nudging in education," Economics of Education Review, Elsevier, vol. 64(C), pages 313-342.
    4. Schwerdt, Guido & Chingos, Matthew M., 2015. "Virtual Schooling and Student Learning: Evidence from the Florida Virtual School," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113202, Verein für Socialpolitik / German Economic Association.
    5. Kaiser, Tim & Lusardi, Annamaria & Menkhoff, Lukas & Urban, Carly, 2022. "Financial education affects financial knowledge and downstream behaviors," Journal of Financial Economics, Elsevier, vol. 145(2), pages 255-272.
    6. Jacob L. Vigdor & Helen F. Ladd & Erika Martinez, 2014. "Scaling The Digital Divide: Home Computer Technology And Student Achievement," Economic Inquiry, Western Economic Association International, vol. 52(3), pages 1103-1119, July.
    7. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    8. William B. Walstad & Michael Watts, 2015. "Perspectives on Economics in the School Curriculum: Coursework, Content, and Research," The Journal of Economic Education, Taylor & Francis Journals, vol. 46(3), pages 324-339, July.
    9. Cassandra M.D. Hart & Elizabeth Friedmann & Michael Hill, 2018. "Online Course-taking and Student Outcomes in California Community Colleges," Education Finance and Policy, MIT Press, vol. 13(1), pages 42-71, Winter.
    10. Batty, Michael & Collins, J. Michael & O’Rourke, Collin & Odders-White, Elizabeth, 2020. "Experiential financial education: A field study of my classroom economy in elementary schools," Economics of Education Review, Elsevier, vol. 78(C).
    11. Casey Totenhagen & Deborah Casper & Kelsey Faber & Leslie Bosch & Christine Wiggs & Lynne Borden, 2015. "Youth Financial Literacy: A Review of Key Considerations and Promising Delivery Methods," Journal of Family and Economic Issues, Springer, vol. 36(2), pages 167-191, June.
    12. Di Xu & Shanna S. Jaggars, 2014. "Performance Gaps between Online and Face-to-Face Courses: Differences across Types of Students and Academic Subject Areas," The Journal of Higher Education, Taylor & Francis Journals, vol. 85(5), pages 633-659, September.
    13. Backes, Ben & Cowan, James, 2019. "Is the pen mightier than the keyboard? The effect of online testing on measured student achievement," Economics of Education Review, Elsevier, vol. 68(C), pages 89-103.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kaiser, Tim & Oberrauch, Luis, 2021. "Economic education at the expense of indoctrination? Evidence from Germany," EconStor Preprints 245801, ZBW - Leibniz Information Centre for Economics.
    2. Oberrauch, Luis & Kaiser, Tim, 2024. "Digital Interventions to Increase Financial Knowledge: Evidence from a Pilot RCT," IZA Discussion Papers 16811, IZA Network @ LISER.
    3. Luis Oberrauch & Tim Kaiser, 2024. "Financial Education or Incentivizing Learning-by-Doing? Evidence from an RCT with Undergraduate Students," CESifo Working Paper Series 11187, CESifo.
    4. Gregory N. Price & Christopher Surprenant, 2026. "The effect of high school only financial education on financial literacy, financial knowledge, and adult financial outcomes: Some treatment effect evidence from the National Financial Capability Study," Review of Financial Economics, John Wiley & Sons, vol. 44(2), April.
    5. Veronica Frisancho, 2023. "Is School-Based Financial Education Effective? Immediate and Long-Lasting Impacts on High School Students," The Economic Journal, Royal Economic Society, vol. 133(651), pages 1147-1180.
    6. Sconti, Alessia & Caserta, Maurizio & Ferrante, Livio, 2024. "Gen Z and financial education: Evidence from a randomized control trial in the South of Italy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 112(C).
    7. Sconti, Alessia, 2022. "Digital vs. in-person financial education: What works best for Generation Z?," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 300-318.
    8. Piza, Caio & Furtado,Isabela & Amorim, Vivian De Fatima, 2023. "Experimental Evaluation of a Financial Education Program in Elementary and Middle School Grades," Policy Research Working Paper Series 10511, The World Bank.
    9. Oberrauch, Luis & Kaiser, Tim, 2024. "Financial Education or Incentivizing Learning-By-Doing? Evidence from an RCT with Undergraduate Students," Journal of Behavioral and Experimental Finance, Elsevier, vol. 43(C).
    10. Cannistrà, Marta & De Beckker, Kenneth & Agasisti, Tommaso & Amagir, Aisa & Põder, Kaire & Vartiak, Lukáš & De Witte, Kristof, 2024. "The impact of an online game-based financial education course: Multi-country experimental evidence," Journal of Comparative Economics, Elsevier, vol. 52(4), pages 825-847.
    11. Thomas A. Hanson, 2022. "Family Communication, Privacy Orientation, & Financial Literacy: A Survey of U.S. College Students," JRFM, MDPI, vol. 15(11), pages 1-13, November.
    12. Glenzer, Franca & Michaud, Pierre-Carl & Staubli, Stefan, 2025. "Frames, incentives, and education: Effectiveness of interventions to delay public pension claiming," Journal of Public Economics, Elsevier, vol. 248(C).
    13. Firth, Chris & Stewart, Neil & Antoniou, Constantinos & Leake, David, 2023. "The effects of personality and IQ on portfolio outcomes," Finance Research Letters, Elsevier, vol. 51(C).
    14. Stephen Day & Evelyn Nunes & Bruno Sultanum, 2023. "Is It Still an Economics Course? The Effect of a Standardized Personal Finance Test on the Learning of Economics," The American Economist, Sage Publications, vol. 68(2), pages 277-294, October.
    15. Clark, Robert L. & Lin, Chuanhao & Lusardi, Annamaria & Mitchell, Olivia S. & Sticha, Andrea, 2025. "Evaluating the effects of a low-cost, online financial education program," Journal of Economic Behavior & Organization, Elsevier, vol. 232(C).
    16. Andrej Cupák & Pirmin Fessler & Maria Silgoner & Elisabeth Ulbrich, 2021. "Exploring Differences in Financial Literacy Across Countries: The Role of Individual Characteristics and Institutions," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(2), pages 409-438, December.
    17. Beata Świecka & Patrycja Kowalczyk-Rólczyńska & Sylwia Pieńkowska-Kamieniecka & Jakub Śledziowski & Paweł Terefenko, 2025. "The Influence of Factors in Consumer Sustainable Auto-Enrolment Pensions," Sustainability, MDPI, vol. 17(3), pages 1-22, February.
    18. Gerrans, Paul, 2021. "Undergraduate student financial education interventions: Medium term evidence of retention, decay, and confidence in financial literacy," Pacific-Basin Finance Journal, Elsevier, vol. 67(C).
    19. Rodriguez-Raga, Santiago & Martinez-Camelo, Natalia, 2022. "Game, guide or website for financial education improvement: Evidence from an experiment in Colombian schools," Journal of Behavioral and Experimental Finance, Elsevier, vol. 33(C).
    20. Harrison, Jennifer L. & Sinnewe, Elisabeth & Westermann, Steffen & Nicholson, Gavin, 2026. "Unpacking financial (dis)engagement of young adults transitioning into the workforce: An investigation of financial habit clusters," Pacific-Basin Finance Journal, Elsevier, vol. 96(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General
    • A21 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Pre-college

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedlwp:103095. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Scott St. Louis (email available below). General contact details of provider: https://edirc.repec.org/data/frbslus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.