Raising Household Saving: Does Financial Education Work?

Social Security Bulletin 72(2): 39-48, 2012

10 Pages Posted: 3 May 2012 Last revised: 25 Apr 2015

See all articles by William G. Gale

William G. Gale

Brookings Institution

Benjamin H. Harris

Brookings Institution

Ruth Levine

Stanford Law School

Date Written: May 1, 2012

Abstract

This article highlights the prevalence and economic outcomes of financial illiteracy among American households, and reviews previous research that examines how improving financial literacy affects household saving. Analysis of the research literature suggests that previous financial literacy efforts have yielded mixed results. Evidence suggests that interventions provided for employees in the workplace have helped increase household saving, but estimates of the magnitude of the impact vary widely. For financial education initiatives targeted to other groups, the evidence is much more ambiguous, suggesting a need for more econometrically rigorous evaluations.

Keywords: Economic Education, Habit Formation, Life Cycle, Precautionary Saving, Saving

JEL Classification: A20, A21, E21

Suggested Citation

Gale, William G. and Harris, Benjamin H. and Levine, Ruth, Raising Household Saving: Does Financial Education Work? (May 1, 2012). Social Security Bulletin 72(2): 39-48, 2012. Available at SSRN: https://ssrn.com/abstract=1953629

William G. Gale (Contact Author)

Brookings Institution ( email )

1775 Massachusetts Avenue, NW
Washington, DC 20036
United States
202-797-6148 (Phone)
202-797-6181 (Fax)

Benjamin H. Harris

Brookings Institution ( email )

1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States

Ruth Levine

Stanford Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

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