The Abcs of Financial Education: Experimental Evidence on Attitudes, Behavior, and Cognitive Biases

42 Pages Posted: 20 Apr 2016

See all articles by Fenella Carpena

Fenella Carpena

Oslo Business School

Shawn Allen Cole

Harvard Business School

Jeremy Shapiro

Busara Center for Behavioral Economics

Bilal Zia

World Bank - Development Research Group (DECRG)

Date Written: September 15, 2015

Abstract

This paper uses a large scale field experiment in India to study attitudinal, behavioral, and cognitive constraints that stymie the link between financial education and financial outcomes. The study complements financial education with (i) participant classroom motivation with pay for performance on a knowledge test, (ii)intensity of treatment with personalized financial counseling, and (iii) behavioral nudges with financial goal setting. The analysis finds no impact of pay for performance but significant effects of both counseling and goal setting on real financial outcomes. These results identify important complements to financial education that can bridge the gap between financial knowledge and financial behavior change.

Keywords: Social Development & Poverty, Economics of Education

Suggested Citation

Carpena, Fenella and Cole, Shawn Allen and Shapiro, Jeremy P. and Zia, Bilal, The Abcs of Financial Education: Experimental Evidence on Attitudes, Behavior, and Cognitive Biases (September 15, 2015). World Bank Policy Research Working Paper No. 7413. Available at SSRN: https://ssrn.com/abstract=2661139

Fenella Carpena

Oslo Business School ( email )

PO Box 4, St. Olavs plass
Oslo, 0130
Norway

HOME PAGE: http://www.ocf.berkeley.edu/~fcarpena

Shawn Allen Cole

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Jeremy P. Shapiro

Busara Center for Behavioral Economics ( email )

Nairobi
Kenya

Bilal Zia (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

MC3-445
1818 H Street, N.W.
Washington, DC 20433

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