Financial Education and Financial Knowledge: Evidence from Indian Schools

Abstract

Promoting financial literacy programmes to enhance economic outcomes and financial behaviour is a key development policy objective. However, the empirical evidence on school-based financial education is thin overall, and lacking in low-income countries. We conduct a field survey study that examines the financial education provision in secondary schools in India, using a unique questionnaire and quasi-experimental methods. Specifically, we develop a conceptual framework to explore the interrelationships between financial education, financial knowledge, numeracy skills and financial attitude. Novel findings lend support to the inclusion of finance in school curriculum, and highlight key considerations to enhance its efficacy. Financial education in school leads to an economically nontrivial improvement in students’ financial knowledge. Higher numerical ability complements financial education and considerably boosts the level of financial knowledge for those who study finance. However, education-induced higher financial knowledge does not necessarily result in better financial attitude.

Keywords: Financial Education, Financial Knowledge, Financial Literacy, India, Financial Behaviour, Financial Attitude

JEL Classification: A21, D14, G53, I21, I28