Still Holding Out Promise: A Review of Financial Literacy Education and Financial Counseling Studies

Abstract

This paper analyzes 26 studies that assess the impact of financial education and counseling targeted to low- and moderate-income consumers. Most studies report significant and positive findings, but the magnitude of impacts is often small compared to a control group. The evidence of behavior changes stemming from financial education is even weaker than the evidence of knowledge gains. Given the modest costs of delivering financial education, even these small impacts may be sufficient to support public policies facilitating financial education. Further research is needed to better understand how financial education can impact behavior, particularly by combining delivery methods and employing more personalized coaching-style models.