Does Financial Education Impact Financial Behavior, and If so, When?

Kaiser, Tim; Menkhoff, Lukas

doi:10.2139/ssrn.2753510

Cited by 36 publications

(77 citation statements)

References 107 publications

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“…From systematic methodological research on meta-analysis (see Lipsey and Wilson (2001), who published a leading textbook) we know that there are many definitions of effect sizes such as the standardized mean difference, Cohen's d, Cohen's w, the Odd's Ratio, Hedge's g, and the partial correlation r. Different meta-analytic studies use different definitions such that comparisons between different meta-analysis are difficult. This is also true for Fernandes et al (2014) and Kaiser and Menkhoff (2017), who systematically summarize the conclusions based on 77 and 126 studies, respectively. They analyze the effect of financial education on financial behavior and decisions 10 .…”

Section: Evidence From Meta Studiesmentioning

confidence: 85%

“…There are several reasons for contradictory assessments of the effects of financial education. For instance, studies are usually based on different target groups or different methodological approaches, where the use or nonuse of random control trials (RCT) is of increasing importance (see Hastings et al (2013), Lusardi and Mitchell (2014), or Kaiser and Menkhoff (2017)). …”

Section: Financial Education and Financial Literacymentioning

confidence: 99%

“…Willis (2008) is even skeptical that offering financial education at a teachable moment, which also needs to be a "reachable" moment, has a lasting effect and that people are more likely to learn about personal finance. Empirical evidence from a large meta study by Kaiser and Menkhoff (2017) suggests that offering financial education at a teachable moment indeed shows significant overall effects, but teaching low-income groups has less impact. Thus, effects of financial education seem to be subject to target-group influence.…”

Section: Financial Education To Accumulate Financial Literacy As Endomentioning

confidence: 99%

“…Two comprehensive meta studies, Fernandes et al (2014) and Kaiser and Menkhoff (2017), conclude that financial education interventions only seem to have a substantially small impact on the financial behavior of disadvantaged groups. As it is challenging and not without irony to provide a survey on meta studies, we approach this task from a different angle and mainly review methodological particularities.…”

Section: Evidence From Meta Studiesmentioning

confidence: 99%

“…Different from comprehensive meta-analysis by Fernandes et al (2014), Miller et al (2015 and Kaiser and Menkhoff (2017), we review research papers on a studyby-study basis in order to focus on those studies which allow us to gain some knowledge on the impact of financial education on groups at the bottom of financial inequality. Moreover, we analyze methodological discrepancies, which are often related to the question whether randomized control trials (RCT) are applied or not.…”

Section: Introductionmentioning

confidence: 99%

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Financial Education for the Disadvantaged? A Review

Entorf

Hou

2018

SSRN Journal

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Many researchers and politicians have identified a lack of financial literacy among the disadvantaged groups of the society. Thus, unequal access to financial markets seems to be a major source of economic inequality, and tackling inequality by starting financial education initiatives seems to be a straightforward solution. However, in contrast to the popularity of financial education interventions worldwide, studies on the economic effects of those interventions report mixed results. With a focus on the effect of disadvantaged groups, we review both the theoretical and empirical findings in order to understand why this discrepancy exists. The survey highlights that it is necessary to distinguish between the concepts of financial education, financial literacy and financial behavior in order to disentangle cause and effect. To understand the heterogeneity of potential outcomes, we review theoretical explanations which address the effect of interventions across the population and over the life cycle. Looking at empirical results, we discuss the importance of potentially neglected factors such as cognitive ability, mathematical capability or numeracy, and we find that the young, the immigrants/migrants and the low-income groups obtain more attention from scholars than other disadvantaged groups. Some support in favor of financial education for the young has been detected in terms of higher short-term financial knowledge and awareness, but there is no proven evidence of improved long-term behavior after growing up. From the methodological point of view, in recent years randomized control trials (RCT) have become a popular method to evaluate the effects of financial education, in particular for studies on remittance behavior of migrants. Our review discusses some limitations of both RCTs and econometric studies which might be taken into account by future research. In sum, despite the enthusiasm of many politicians, who see financial education and financial literacy as the key to tackle the problem of financial vulnerability and economic inequality, so far, there is no clear evidence, or at least no scientific consensus, on the effectiveness of performed interventions. The constant search for effective financial education might even cost enormously such that the costs of financial education programs would outweigh potential benefits. It is perhaps true that the financial behavior of the poor is arguably more controlled by lack of aspirations such that financial policy should be directed towards behaviorally motivated anti-poverty policies or simply education in general.Electronic copy available at: https://ssrn.com/abstract=3167709 In contrast to the popularity of financial education interventions worldwide, studies on the economic effects of those interventions report mixed results. With a focus on the effect on disadvantaged groups, we review both the theoretical and empirical findings in order to understand why this discrepancy exists. The survey first highlights that it is necessary to distinguish between the conc...

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Section: Evidence From Meta Studiesmentioning

confidence: 85%

Section: Financial Education and Financial Literacymentioning

confidence: 99%

Section: Financial Education To Accumulate Financial Literacy As Endomentioning

confidence: 99%

Section: Evidence From Meta Studiesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Financial Education for the Disadvantaged? A Review

Entorf

Hou

2018

SSRN Journal

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A methodological overview to defining and measuring “digital” financial literacy

Lyons

Kass-Hanna

2021

Fin Plan Rev

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Researchers and financial practitioners alike recognize the importance of defining and measuring financial literacy (FL) to better understand its relationship to financial behavior and decision-making. Despite many efforts, there is still no widely accepted definition or methodological approach for measuring FL. The rapid expansion of digital financial services (DFS), which promises to enhance financial inclusion and improve personal financial management, has brought to light a new challenge: linking FL to digital literacy (DL) and assessing their dual effect on financial outcomes. Recent research has even proposed a framework to operationalize the emerging concept of digital financial literacy (DFL), as traditional FL definitions and metrics have become insufficient to capture the specificities of financial services within a digital context. This survey article discusses empirical research techniques being used to assess FL, DL, and most recently DFL. It highlights the characteristics and limitations of these approaches and suggests ways to address some of the challenges related to the construction, testing, weighting, and standardization of multidimensional measures, as well as methodological issues related to modeling and estimation. The article is a helpful guide to researchers and practitioners interested in FL in general and in the emerging concept of "digital" financial literacy.

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Financial education for HIV‐vulnerable youth, orphans, and vulnerable children: A systematic review of outcome evidence

Lee¹,

Stücklin²,

Rodríguez

et al. 2020

Campbell Systematic Reviews

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Problem According to Joint United Nations Programme on HIV/AIDS (UNAIDS) and the World Health Organization, HIV is the leading cause of youth mortality in Africa, and the second cause of death among young people worldwide. Global commitments to reverse the HIV epidemic will only be achieved if strategies prioritize children and youth. Relevant evidence reviews found mixed evidence that HIV prevention may be addressed through economic strengthening activities such as financial education for youth. There was some evidence related to the potential for plural interventions that include both financial and sexual, reproductive health education. However, there is limited quality evidence that focused on HIV vulnerable youth in low‐ and middle‐income countries (LMICs). Aims This systematic review assessed the scope and strength of evidence for financial education and plural interventions aimed at reducing HIV vulnerability for youth, orphans and vulnerable children (OVC) in LMICs. Methods Standard methodological procedures expected of systematic reviews were used. Six scientific and 24 grey literature sites were searched for relevant studies in English, French, Spanish and Arabic published between 1990 and 2016. Experimental and quasi‐experimental research methods were considered where data was gathered at baseline and at least 6 months after the end of the intervention. Mixed‐methods studies were considered provided they demonstrated validity in terms of randomization, appropriate sampling and controls, and minimization of bias errors and attrition. Evidence was then analysed and mapped to show types of financial and plural interventions by outcome type, direction and strength of evidence through qualitative assessments by the team. In addition, meta‐analysis of odds ratios was conducted to validate the strength of evidence. This analysis illustrated the relative effect or weight of interventions on HIV‐related outcomes based on confidence levels and sample sizes. Results Of 5,216 records, 16 moderate to higher quality studies representing 10 interventions were identified, mostly focusing on HIV‐vulnerable girls in Sub‐Saharan Africa. More than half of the interventions were plural and included access to finance and counselling or supports to improve confidence, negotiating ability and social conditions. Most studies used an experimental design. Only 11 of the 16 studies had comparable enough measures to be validated with meta‐analysis of odds ratios. Findings The strongest evidence showed plural education interventions with self‐efficacy supports, with and without savings to have positive effects on HIV‐related outcomes. These outcomes included improved knowledge, attitudes and reduced sexual risk‐taking behaviour. Evidence also showed improved self‐efficacy from plural interventions, the changes in confidence, negotiating ability and social conditions that enable people to act on knowledge. Self‐efficacy seems important as both a set of conditions to support reduced vulnerabilities and a way to measure them i...

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Does Financial Education Impact Financial Behavior, and If so, When?

Cited by 36 publications

References 107 publications

Financial Education for the Disadvantaged? A Review

Financial Education for the Disadvantaged? A Review

A methodological overview to defining and measuring “digital” financial literacy

Financial education for HIV‐vulnerable youth, orphans, and vulnerable children: A systematic review of outcome evidence

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