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Financial Education: Interventions and Outcomes

Paper Session

Friday, Jan. 3, 2020 10:15 AM - 12:15 PM (PDT)

Marriott Marquis, Newport Beach
Hosted By: National Association of Economic Educators
  • Chair: Cynthia Harter, Eastern Kentucky University

The Effects of Game-Based Financial Education: New Survey Evidence from Lower Secondary School Students in Finland

Panu Kalmi
,
University of Vaasa
Jaana Rahko
,
University of Vaasa

Abstract

There has been little research in the financial education literature regarding the learning impact of games. We fill this research gap by studying three game-based educational programs that are targeted to the students of lower secondary schools in Finland. We compare the impact of game-based learning environments to traditional classes. We use data from 41 schools in 11 different towns. Even though more than 3000 students responded to both surveys, we had in the end 640 usable observations, the limitation being the lack of parental consent letters. We control for various biases this may introduce in the analysis. We estimate the effects of game-based environment on learning by using the difference-in- differences method and including a large number of covariates. Our results indicate that for students who participate in game-based interventions, economic and financial knowledge increases significantly more than for students who do not have access to the interventions. This result is robust with different definitions of treatment effects (average treatment effect on the treated vs. intention to treat). There is also evidence that participating in two programs (instead of just one) produces better learning outcomes. The interest of students towards economics also increases more with the intervention group than with the control group. However, the effects of education on self-reported financial behaviors are weak. While similar results have been obtained in prior literature, a novelty of these findings are that instead of focusing on a situation of where there is an intervention vs. an absence of intervention, these findings relate to comparisons between two different types of teaching approaches. The findings strongly support pedagogical innovations aiming to involve students in active learning approaches and making studying economics simultaneously more practical and fun.

Impact of Adverse Childhood Experiences on Financial Security in Adulthood

Cynthia Harter
,
Eastern Kentucky University
John Harter
,
Eastern Kentucky University

Abstract

Research about the effectiveness of financial education shows mixed results in terms of both improved knowledge and changes in financial decision making. Studies have shown positive outcomes with projects that have been tailored to specific populations. As more states mandate financial education in schools, it is increasingly important to identify characteristics of a population that relate to the effectiveness of financial education. It is equally important to identify a measure that encompasses all of the critical components of financial literacy. As an alternative to measuring financial knowledge or behavior, the Consumer Personal Finance Bureau recommends using the broader definition of financial wellbeing as the desired outcome for financial literacy efforts. One element of this definition is financial security in the present, which is measured by having control over your own day-to-day, month-to-month finances. This study uses interdisciplinary analyses and behavioral health data to identify various factors that impact adult financial security. The Center for Disease Control’s Behavioral Risk Factor Surveillance System survey data are used in an ordered probit model to investigate the determinants of financial security with respect to housing and food for adult respondents. The study specifically identifies impacts of adverse childhood experiences on financial security in adulthood. Results can be used to inform K-12 educators who are implementing state mandates in financial literacy about the importance of addressing adverse childhood experiences when teaching financial education because this could potentially yield more effective outcomes.

The Effects of Financial Education Received in High School, College, and Employment on the Financial Behaviors of Young Adults

Jamie Wagner
,
University of Nebraska-Omaha
William B. Walstad
,
University of Nebraska–Lincoln

Abstract

This study investigates the effects of financial education received in high school, college, or employment (separately or in combination) on financial behaviors of young adults (ages 18-34) in the United States. It builds on previous research (Wagner and Walstad, Journal of Consumer Affairs, 2019) which used the 2015 National Financial Capability Study (NFCS) data with all adults (ages 18-65+) to analyze the effects of financial education on long-term financial behaviors (e.g., future-oriented and planning ones) and short- term financial behaviors (e.g., ones often learned from regular feedback and experience). The 2018 NFCS data are major improvement over the 2015 NFCS data because in addition to the type of financial education received, it has metrics on the hours of instruction and whether it was required. For this new study, we focus exclusively on two young adult cohorts for comparison purposes: one sample, ages 18- 24, and a second sample, ages 25-34. We also combine the two sample to report the overall results. In preparing this proposal, we analyzed different financial behaviors with 2018 NFCS data in a probit regression model with controls for the effects of financial education, financial literacy, and demographic variables. Our preliminary results show that financial education (by type, hours, or requirement) has positive and significant effects on long-term financial behaviors—future-oriented ones such making investments, saving for retirement, and insuring assets. By contrast, financial education has mixed effects on short-term financial behaviors—experience-oriented ones with regular feedback such as managing a checking or credit card account and paying bills. The findings are similar when each cohort is analyzed separately (18-24 or 25-34) or in combination (18-34). Further research will be conducted using a wider set of financial behaviors to expand the preliminary findings.

Financial Education in Schools: A Meta-Analysis of Experimental Studies

Tim Kaiser
,
University of Koblenz-Landau & German Institute for Economic Research
Lukas Menkhoff
,
Humboldt University of Berlin & German Institute for Economic Research

Abstract

We study the literature on school financial education programs for children and youth via a quantitative meta-analysis of 37 (quasi-) experiments. We find that financial education treatments have, on average, sizeable impacts on financial knowledge (+0.33 SD), similar to educational interventions in other domains. Additionally, we document smaller effects on financial behaviors among students (+0.07 SD). When restricting the sample to 18 randomized experiments average effect sizes are estimated to be about 0.15 SD units on financial knowledge and 0.07 SD units on financial behaviors. These results are robust irrespective of the metaanalytic method used and when accounting for publication bias. Subgroup analyses show the beneficial effect of more intensive treatments, albeit with decreasing marginal returns.
Discussant(s)
Tim Kaiser
,
University of Koblenz-Landau & German Institute for Economic Research
Panu Kalmi
,
University of Vaasa
Cynthia Harter
,
Eastern Kentucky University
William B. Walstad
,
University of Nebraska–Lincoln
JEL Classifications
  • A2 - Economic Education and Teaching of Economics