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Do High Schools Choose Financial Education Policies Based on Their Neighbors?

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  • Luedtke, Allison Oldham

    (St. Olaf College)

  • Urban, Carly

    (Montana State University)

Abstract

Financial Education courses required for high school graduation make a difference in students' future financial lives. Given that schools exercise local control, there are a variety of types of courses offered and required by US high schools. It remains unclear why and where this variation exists. Using a novel data set of unique high school personal finance course offerings and requirements paired with distances between high schools in the US, we approximate a network of nearby peer high schools. We use this network of peer schools to measure the potential influence of nearby schools on an individual high school's decision to offer financial education courses. We find that high schools are more likely to require or offer financial education courses similar to those of their peer schools. Having an additional peer that incorporates financial education into their curriculum makes it more likely a high school will change their curriculum to do the same. This is true across types of courses: required standalone courses, required courses that incorporate but do not solely focus on personal finance, and standalone electives. The results indicate that schools' nearby peers are related to what types of services to offer their students, and these networks are more predictive than economic or demographic characteristics of the school in determining personal finance course requirements. Local networks can potentially provide momentum in expanding access to financial education.

Suggested Citation

  • Luedtke, Allison Oldham & Urban, Carly, 2021. "Do High Schools Choose Financial Education Policies Based on Their Neighbors?," IZA Discussion Papers 14288, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp14288
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    References listed on IDEAS

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    1. Urban, Carly & Schmeiser, Maximilian & Collins, J. Michael & Brown, Alexandra, 2020. "The effects of high school personal financial education policies on financial behavior," Economics of Education Review, Elsevier, vol. 78(C).
    2. Frisancho, Veronica, 2020. "The impact of financial education for youth," Economics of Education Review, Elsevier, vol. 78(C).
    3. 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.
    4. Miriam Bruhn & Luciana de Souza Leão & Arianna Legovini & Rogelio Marchetti & Bilal Zia, 2016. "The Impact of High School Financial Education: Evidence from a Large-Scale Evaluation in Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 8(4), pages 256-295, October.
    5. Leonardo Bursztyn & Florian Ederer & Bruno Ferman & Noam Yuchtman, 2014. "Understanding Mechanisms Underlying Peer Effects: Evidence From a Field Experiment on Financial Decisions," Econometrica, Econometric Society, vol. 82(4), pages 1273-1301, July.
    6. Melody Harvey, 2019. "Impact of Financial Education Mandates on Younger Consumers' Use of Alternative Financial Services," Journal of Consumer Affairs, Wiley Blackwell, vol. 53(3), pages 731-769, September.
    7. Mangrum, Daniel, 2022. "Personal finance education mandates and student loan repayment," Journal of Financial Economics, Elsevier, vol. 146(1), pages 1-26.
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    Cited by:

    1. Acton, Riley K. & Cook, Emily E. & Luedtke, Allison, 2022. "The influence of peer institutions on colleges’ decisions: Evidence from fall 2020 reopening plans," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 288-302.
    2. Harvey, Melody & Urban, Carly, 2023. "Does financial education affect retirement savings?," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).

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    More about this item

    Keywords

    financial education; financial literacy; networks;
    All these keywords.

    JEL classification:

    • G53 - Financial Economics - - Household Finance - - - Financial Literacy
    • I20 - Health, Education, and Welfare - - Education - - - General
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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