Does Financial Education Impact Financial Literacy and Financial Behavior, and if so, When?

77 Pages Posted: 11 Aug 2017

See all articles by Tim Kaiser

Tim Kaiser

University of Koblenz-Landau, Department of Economics; German Institute for Economic Research (DIW Berlin) - Department of International Economics; University of Koblenz-Landau

Lukas Menkhoff

German Institute for Economic Research (DIW Berlin); Humboldt University of Berlin - Faculty of Economics

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Date Written: August 9, 2017

Abstract

A meta-analysis of 126 impact evaluation studies finds that financial education significantly impacts financial behavior and, to an even larger extent, financial literacy. These results also hold for the subsample of randomized experiments (RCTs). However, intervention impacts are highly heterogeneous: financial education is less effective for low-income clients as well as in low- and lower-middle income economies. Specific behaviors, such as the handling of debt, are more difficult to influence and mandatory financial education tentatively appears to be less effective. Thus, intervention success depends crucially on increasing education intensity and offering financial education at a "teachable moment."

Keywords: Economics of Education

Suggested Citation

Kaiser, Tim and Menkhoff, Lukas, Does Financial Education Impact Financial Literacy and Financial Behavior, and if so, When? (August 9, 2017). World Bank Policy Research Working Paper No. 8161. Available at SSRN: https://ssrn.com/abstract=3016931

Tim Kaiser (Contact Author)

University of Koblenz-Landau, Department of Economics ( email )

56070 Koblenz-Metternich
Germany

German Institute for Economic Research (DIW Berlin) - Department of International Economics ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

University of Koblenz-Landau ( email )

August-Croissant-Str. 5
Landau, 76829
Germany

HOME PAGE: http://www.uni-koblenz-landau.de/

Lukas Menkhoff

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

Humboldt University of Berlin - Faculty of Economics ( email )

Spandauer Strasse 1
Berlin
Germany

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