Learning the Impact of Financial Education When Take-Up is Low

38 Pages Posted: 8 Nov 2017

See all articles by Gabriel Lara Ibarra

Gabriel Lara Ibarra

The World Bank - Poverty and Equity Global Practice

David J. McKenzie

World Bank - Development Research Group (DECRG); IZA Institute of Labor Economics

Claudia Ruiz Ortega

World Bank - Development Research Group (DECRG)

Date Written: November 7, 2017

Abstract

Financial education programs are increasingly offered by governments, nonprofits, and financial institutions. However, voluntary participation rates in such programs are often very low, posing a severe challenge for randomized experiments attempting to measure their impact. This study uses a large experiment on more than 100,000 credit card clients in Mexico. The study shows how the richness of financial data allows combining nonexperimental methods with the experiment to yield credible measures of impact, even with take-up rates below 1 percent. The findings show that a financial education workshop and personalized coaching result in a higher likelihood of paying credit cards on time, and of making more than the minimum payment, but do not reduce spending, resulting in higher profitability for the bank.

Keywords: Adult Outreach

Suggested Citation

Lara Ibarra, Gabriel and McKenzie, David John and Ruiz Ortega, Claudia, Learning the Impact of Financial Education When Take-Up is Low (November 7, 2017). World Bank Policy Research Working Paper No. 8238. Available at SSRN: https://ssrn.com/abstract=3067085

Gabriel Lara Ibarra (Contact Author)

The World Bank - Poverty and Equity Global Practice ( email )

1818 H St NW
Washington, DC 20433
United States

David John McKenzie

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

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Claudia Ruiz Ortega

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

1818 H Street, NW
Washington, DC 20433
United States

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