Can You Help Someone Become Financially Capable? A Meta-Analysis of the Literature

This paper presents a systematic and comprehensive meta-analysis of the literature on financial education interventions. The analysis focuses on financial education studies designed to strengthen the financial knowledge and behaviors of consumers. The analysis identifies 188 papers and articles that present impact results of interventions designed to increase consumers' financial knowledge (financial literacy) or skills, attitudes, and behaviors (financial capability). These papers are diverse across a number of dimensions, including objectives of the program intervention, expected outcomes, intensity and duration of the intervention, delivery channel used, and type of population targeted. However, there are a few key outcome indicators where a subset of papers are comparable, including those that address savings behavior, defaults on loans, and financial skills, such as record keeping. The results from the meta analysis indicate that financial literacy and capability interventions can have a positive impact in some areas (increasing savings and promoting financial skills such as record keeping) but not in others (credit default).

[1]  Karen Gross,et al.  Financial Literacy Teacher Training: A Multiple-Measure Evaluation , 2005 .

[2]  Tahira K. Hira,et al.  A workplace and gender-related perspective on financial planning information sources and knowledge outcomes , 2006 .

[3]  J. Collins.  The Impacts of Mandatory Financial Education: Evidence from a Randomized Field Study , 2013 .

[4]  Leora F. Klapper,et al.  Financial literacy and its consequences: Evidence from Russia during the financial crisis , 2013 .

[5]  N. Fiala,et al.  Bringing the Bank to the doorstep : does financial education influence savings behavior among the poor? - evidence from a randomized financial literacy program in India , 2012 .

[6]  D. McKenzie,et al.  Getting Credit to High Return Microentrepreneurs: The Results of an Information Intervention , 2011 .

[7]  Jinhee Kim,et al.  Workplace Financial Education Improves Personal Financial Wellness , 1999 .

[8]  Steven D. Dolvin,et al.  Financial education and asset allocation , 2006 .

[9]  A. Lusardi,et al.  Financial Literacy and Stock Market Participation , 2007 .

[10]  A. Aysan,et al.  Credit Card Satisfaction and Financial Literacy: Evidence from an Emerging Market Economy , 2012 .

[11]  Lewis Mandell,et al.  The Impact of Financial Literacy Education on Subsequent Financial Behavior , 2009 .

[12]  N. Mayer,et al.  National Foreclosure Mitigation Counseling Program Evaluation Preliminary Analysis of Program Effects September 2010 Update , 2010 .

[13]  Jinhee Kim,et al.  Relationships Among Credit Counseling Clients' Financial Wellbeing, Financial Behaviors, Financial Stressor Events, and Health , 2013 .

[14]  S. Tennyson,et al.  State Curriculum Mandates and Student Knowledge of Personal Finance , 2001 .

[15]  Sondra G. Beverly,et al.  Household financial management: the connection between knowledge and behavior , 2003 .

[16]  Joel B. Cohen,et al.  Using Loan plus Lender Literacy Information to Combat One-Sided Marketing of Debt Consolidation Loans , 2011 .

[17]  R. Pande,et al.  Do Traditional Institutions Constrain Female Entrepreneurship? A Field Experiment on Business Training in India , 2010 .

[18]  Angela C. Lyons,et al.  Moving from unbanked to banked: evidence from the Money Smart program , 2005 .

[19]  John E. Grable,et al.  Employee Education and the Likelihood of Having a Retirement Savings Program , 2013 .

[20]  M. Sherraden,et al.  Financial Capability in Children: Effects of Participation in a School-Based Financial Education and Savings Program , 2011 .

[21]  D. Goodman,et al.  Defined Contribution Plans Emerging in the Public Sector , 2008 .

[22]  M. Sherraden,et al.  Can the Poor Save?: Saving and Asset Building in Individual Development Accounts , 2005 .

[23]  C. Robb,et al.  The demand for financial professionals' advice: The role of financial knowledge, satisfaction, and confidence , 2012 .

[24]  Kenneth N. Ryack.  The Impact of Family Relationships and Financial Education on Financial Risk Tolerance , 2011 .

[25]  J. Birkenmaier,et al.  Does Homeownership Education and Counseling (HEC) Help Credit Scores? , 2005 .

[26]  Jonathan S. Spader,et al.  Does homeownership counseling affect the prepayment and default behavior of affordable mortgage borrowers , 2008 .

[27]  E. Haley,et al.  The Interplay between Advertising Disclosures and Financial Knowledge in Mutual Fund Investment Decisions , 2012 .

[28]  Dean Yang,et al.  Transnational household finance: A field experiment on the cross-border impacts of financial education for migrant workers , 2012 .

[29]  Jing Cai,et al.  Social Networks and the Decision to Insure , 2012 .

[30]  S. Seiling,et al.  Moving into Action: Application of the Transtheoretical Model of Behavior Change to Financial Education , 2004 .

[31]  Antoinette Schoar,et al.  Keeping it Simple: Financial Literacy and Rules of Thumb , 2010 .

[32]  William L. Skimmyhorn.  Essays in Behavioral Household Finance , 2012 .

[33]  K. Otsuka,et al.  KAIZEN for Managerial Skills Improvement in Small and Medium Enterprises: An Impact Evaluation Study in a knitwear cluster in Vietnam , 2012 .

[34]  Annamaria Lusardi,et al.  Financial Literacy and Planning: Implications for Retirement Wellbeing , 2005 .

[35]  Sondra G. Beverly,et al.  Savings and Asset Accumulation in Individual Development Accounts , 2001 .

[36]  Andrew T. Carswell.  Does Housing Counseling Change Consumer Financial Behaviors? Evidence from Philadelphia , 2009 .

[37]  Tahira K. Hira,et al.  Understanding the Impact of Employer-Provided Financial Education on Workplace Satisfaction , 2005 .

[38]  R. B. Swain,et al.  Microfinance ‘Plus’: The Impact of Business Training on Indian Self Help Groups , 2010 .

[39]  Bringing financial literacy and education to low and middle income countries: The need to review, adjust, and extend current wisdom , 2010 .

[40]  O. Mitchell,et al.  Financial Literacy and Retirement Planning: New Evidence from the Rand American Life Panel , 2007 .

[41]  P. Zorn,et al.  A little knowledge is a good thing: empirical evidence of the effectiveness of pre-purchase homeownership counseling , 2003 .

[42]  L. Muller.  Does retirement education teach people to save pension distributions? , 2001, Social security bulletin.

[43]  Stephan Meier,et al.  Under-Savers Anonymous: Evidence on Self-Help Groups and Peer Pressure as a Savings Commitment Device , 2012, SSRN Electronic Journal.

[44]  Gladys G. Shelton,et al.  First-Time Homebuyers Programs as an Impetus for Change in Budget Behavior , 1998 .

[45]  A. Lusardi,et al.  Financial literacy and retirement planning in Germany* , 2011, Journal of Pension Economics and Finance.

[46]  Changcheng Song.  Financial Illiteracy and Pension Contributions: A Field Experiment on Compound Interest in China , 2015, The Review of Financial Studies.

[47]  A. Lusardi,et al.  Financial literacy and retirement preparation in the Netherlands* , 2011, Journal of Pension Economics and Finance.

[48]  Douglas G. Altman,et al.  Statistical Methods for Examining Heterogeneity and Combining Results from Several Studies in Meta‐Analysis , 2008 .

[49]  Shawn Cole,et al.  High School and Financial Outcomes: The Impact of Mandated Personal Finance and Mathematics Courses , 2013 .

[50]  Noel A. Card,et al.  Financial Socialization of First-year College Students: the Roles of Parents, Work, and Education , 2009 .

[51]  Trent W. Maurer,et al.  Financial Education With College Students: Comparing Peer-Led and Traditional Classroom Instruction , 2011 .

[52]  J. Seligman,et al.  Learning by doing: Active employer sponsored retirement savings plan participation and household wealth accumulation , 2012 .

[53]  John G. Lynch,et al.  A Meta-Analytic and Psychometric Investigation of the Effect of Financial Literacy on Downstream Financial Behaviors , 2012 .

[54]  O. Mitchell,et al.  How Financial Literacy Affects Household Wealth Accumulation. , 2012, The American economic review.

[55]  M. Schug,et al.  An Incentives-Based Approach to Implementing Financial Fitness for Life in the Milwaukee Public Schools , 2008 .

[56]  Shawn Cole,et al.  Barriers to Household Risk Management: Evidence from India. , 2010, American economic journal. Applied economics.

[57]  C. Bowen,et al.  Empowering Young Adults to Control Their Financial Future. , 2006 .

[58]  Chang-Keun Han,et al.  Assets beyond Savings in Individual Development Accounts , 2009, Social Service Review.

[59]  J. Norvilitis,et al.  The role of parents in college students' financial behaviors and attitudes , 2010 .

[60]  J. Yoong,et al.  Asking for Help: Survey and Experimental Evidence on Financial Advice and Behavior Change , 2010 .

[61]  O. Mitchell,et al.  How Ordinary Consumers Make Complex Economic Decisions: Financial Literacy and Retirement Readiness , 2009 .

[62]  Angela Romagnoli,et al.  Does Financial Education at School Work? Evidence from Italy , 2013 .

[63]  W. Rohe,et al.  The Ten-Year Impacts of Individual Development Accounts on Homeownership: Evidence from a Randomized Experiment , 2011 .

[64]  Wolfgang Viechtbauer,et al.  Publication bias in meta-analysis: Prevention, assessment and adjustments , 2007, Psychometrika.

[65]  Mark Schreiner,et al.  Financial Education and Savings Outcomes in Individual Development Accounts , 2001 .

[66]  Justine S. Hastings,et al.  Advertising and Competition in Privatized Social Security: The Case of Mexico ∗ , 2011 .

[67]  Considerations in Financial Education Programming for Women , 2006 .

[68]  Douglas G. Altman,et al.  Systematic Reviews in Health Care: Meta-Analysis in Context: Second Edition , 2008 .

[69]  D. McKenzie,et al.  The Impact of Financial Literacy Training for Migrants , 2012 .

[70]  Matthew Martin.  A Literature Review on the Effectiveness of Financial Education , 2007 .

[71]  Outcomes of On-Line Financial Education for Chronically Ill Rural Women , 2011 .

[72]  M. Staten,et al.  GREGORY ELLIEHAUSEN, E. CHRISTOPHER LUNDQUIST, AND MICHAEL E. STATEN The Impact of Credit Counseling on Subsequent Borrower Behavior , 2007 .

[73]  Douglas D. Evanoff,et al.  Do Financial Counseling Mandates Improve Mortgage Choice and Performance? Evidence from a Legislative Experiment , 2009 .

[74]  Shawn Cole,et al.  Is High School the Right Time to Teach Self-control? The Effect of Financial Education and Mathematics Courses on Savings Behavior , 2010 .

[75]  Tahira K. Hira,et al.  Self-directed Financial Learning and Financial Satisfaction , 2005 .

[76]  Decio Coviello,et al.  Financial education and investment attitudes in high schools: evidence from a randomized experiment , 2011 .

[77]  Sam Allgood,et al.  The Effects of Perceived and Actual Financial Literacy on Financial Behaviors , 2012 .

[78]  Alhassan Iddrisu,et al.  How Can Micro and Small Enterprises in Sub-Saharan Africa Become More Productive? the Impacts of Experimental Basic Managerial Training , 2011 .

[79]  Lisa Xu,et al.  Financial Literacy Around the World: An Overview of the Evidence with Practical Suggestions for the Way Forward , 2012 .

[80]  J. Tobacman,et al.  Marketing Complex Financial Products in Emerging Markets: Evidence from Rainfall Insurance in India , 2011 .

[81]  T. Jappelli,et al.  Cognitive Abilities and Portfolio Choice , 2006 .

[82]  A. Lusardi.  Household Saving Behavior: The Role of Financial Literacy, Information, and Financial Education Programs , 2008 .

[83]  Bonnie L. Barber,et al.  Pathways to life success: A conceptual model of financial well-being for young adults , 2009 .

[84]  Sendhil Mullainathan,et al.  Getting to the Top of Mind: How Reminders Increase Saving , 2010, Manag. Sci..

[85]  Douglas D. Evanoff,et al.  Do Financial Counseling Mandates Improve Mortgage Choice and Performance ? Evidence from a Natural Experiment , 2009 .

[86]  L. Orr,et al.  Evaluation of the American Dream Demonstration: Final Evaluation Report , 2004 .

[87]  Bilal Zia,et al.  Who You Train Matters: Identifying Complementary Effects of Financial Education on Migrant Households , 2012 .

[88]  Robert Brooks,et al.  The Factors Influencing Saving in a Matched Savings Program: Goals, Knowledge of Payment Instruments, and Other Behavior , 2008 .

[89]  Jonathan J. Fox,et al.  The Impact of Personal Finance Education Delivered in High School and College Courses , 2007 .

[90]  Paul W. Grimes,et al.  High School Economic Education and Access to Financial Services , 2010 .

[91]  S. G. Allen,et al.  Pension Plan Distributions: The Importance of Financial Literacy , 2010 .

[92]  Daniel Fernandes,et al.  Financial Literacy, Financial Education and Downstream Financial Behaviors (full paper and web appendix) , 2014, Manag. Sci..

[93]  C. González-Vega,et al.  Credit Counseling and Mortgage Termination by Low-Income Households , 2005 .

[94]  M. King,et al.  CAUSE AND EFFECT OF FINANCIAL ACCESS: CROSS-COUNTRY EVIDENCE FROM THE FINSCOPE SURVEYS , 2009 .

[95]  R. Clark,et al.  Sex Differences, Financial Education, and Retirement Goals , 2003 .

[96]  Bilal Zia,et al.  Unpacking the Causal Chain of Financial Literacy , 2011 .

[97]  L. Becchetti,et al.  Financial Education on Secondary School Students: The Randomized Experiment Revisited , 2012 .

[98]  Jonathan J. Fox,et al.  The Role of Professors in Improving Financial Literacy: Roundtable Session Highlights from the 2012 FMA Annual Meeting , 2013 .

[99]  M. Bruhn,et al.  Stimulating managerial capital in emerging markets: the impact of business training for young entrepreneurs , 2013 .

[100]  R. Todd,et al.  Effectiveness of Online "Early Intervention" Financial Education for Credit Cardholders , 2005 .

[101]  L. Borden,et al.  Changing College Students’ Financial Knowledge, Attitudes, and Behavior through Seminar Participation , 2008 .

[102]  Jin Huang,et al.  Financial Knowledge and Child Development Account Policy: A Test of Financial Capability , 2013 .

[103]  Lisa J. Servon,et al.  Consumer Financial Literacy and the Impact of Online Banking on the Financial Behavior of Lower‐Income Bank Customers , 2008 .

[104]  Shawn Cole,et al.  Smart Money: The Effect of Education on Financial Behavior , 2012 .

[105]  Jinhee Kim,et al.  Evaluation of Workplace Personal Financial Education , 1998 .

[106]  Dean S. Karlan,et al.  Social Networks, Financial Literacy and Index Insurance , 2013 .

[107]  X. Giné,et al.  Money or Ideas? A Field Experiment on Constraints to Entrepreneurship in Rural Pakistan , 2014 .

[108]  M. Finke,et al.  Financial Advice: Does it Make a Difference? , 2012 .

[109]  Lewis Mandell.  Starting Younger: Evidence Supporting the Effectiveness of Personal Financial Education for Pre-High School Students , 2009 .

[110]  R. Wiener,et al.  Debtor education, financial literacy, and pending bankruptcy legislation. , 2005, Behavioral sciences & the law.

[111]  B. Bernheim,et al.  The effects of financial education in the workplace: evidence from a survey of households , 2003 .

[112]  C. González-Vega,et al.  Evidence on the effect of credit counseling on mortgage loan default by low-income households , 2006 .

[113]  G. Calderón,et al.  Business Literacy and Development: Evidence from a Randomized Controlled Trial in Rural Mexico , 2013, Economic Development and Cultural Change.

[114]  J. Collins.  Exploring the Design of Financial Counseling for Mortgage Borrowers in Default , 2007 .

[115]  S. Meier,et al.  Financial Literacy and Subprime Mortgage Delinquency: Evidence from a Survey Matched to Administrative Data , 2010 .

[116]  Douglas D. Evanoff,et al.  Learning to Cope: Voluntary Financial Education and Loan Performance during a Housing Crisis , 2010 .

[117]  J. Ruiz-Tagle,et al.  Micro-Entrepreneurship Training and Asset Transfers: Short Term Impacts on the Poor , 2013 .

[118]  Angela C. Lyons,et al.  Translating Financial Education into Behavior Change for Low-Income Populations , 2013 .

[119]  Meg Schnabel,et al.  Economic Education for Battered Women , 2007 .

[120]  Jonathan Zinman,et al.  List Randomization for Sensitive Behavior: An Application for Measuring Use of Loan Proceeds , 2011 .

[121]  Education and Saving: The Long-Term Effects of High School Financial Curriculum Mandates , 1997 .

[122]  B. Tungodden,et al.  Teaching Business in Tanzania: Evaluating Participation and Performance , 2009 .

[123]  A. Kapteyn,et al.  Five Steps to Planning Success , 2010 .

[124]  Brigitte C. Madrian,et al.  Are Empowerment and Education Enough? Underdiversification in 401(k) Plans , 2006 .

[125]  Justine S. Hastings,et al.  Financial Literacy, Financial Education and Economic Outcomes. NBER Working Paper No. 18412. , 2012 .

[126]  David Laibson,et al.  Saving or Retirement on the Path of Least Resistance , 2004 .

[127]  M. H. McCormick.  The Effectiveness of Youth Financial Education: A Review of the Literature , 2008 .

[128]  Frederick W. Langrehr.  Consumer Education: Does It Change Students' Competencies and Attitudes? , 1979 .

[129]  Jinhee Kim,et al.  Factors Related to Retirement Confidence: Retirement Preparation and Workplace Financial Education , 2006 .

[130]  O. Mitchell,et al.  The Economic Importance of Financial Literacy: Theory and Evidence , 2013, Journal of economic literature.

[131]  Lewis Mandell,et al.  Motivation and financial literacy , 2007 .

[132]  Angela C. Lyons,et al.  Are Financial Education Programs Meeting the Needs of Financially Disadvantaged Consumers? , 2007 .

[133]  Tansel Yilmazer,et al.  Effectiveness of Financial Education on Financial Management Behavior and Account Usage: Evidence from a ‘Second Chance’ Program , 2008 .

[134]  V. Mendes,et al.  Financial literacy and portfolio diversification , 2010 .

[135]  E. Duflo,et al.  The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment , 2002 .

[136]  Giovanni Mastrobuoni,et al.  Do better–informed workers make better retirement choices? A test based on the Social Security Statement , 2007 .

[137]  B. Klinger,et al.  Can Entrepreneurial Activity be Taught? Quasi-Experimental Evidence from Central America , 2011 .

[138]  Joy M. Jacobs-Lawson,et al.  AN EXPERIMENTAL COMPARISON OF RETIREMENT PLANNING INTERVENTION SEMINARS , 2003 .

[139]  Lei Ding,et al.  Post-Purchase Counseling and Default Resolutions Among Low- and Moderate-Income Borrowers , 2008 .

[140]  J. Hogarth,et al.  Does Financial Education Affect Soldiers’ Financial Behavior? , 2009 .

[141]  Karen P. Varcoe,et al.  Using a Financial Education Curriculum for Teens , 2013 .

[142]  Sameer Khatiwada,et al.  Do Financial Education Programs Work? Working Paper 08-03. , 2008 .

[143]  Robert Holzmann.  Bringing Financial Literacy and Education to Low and Middle Income Countries: The Need to Review, Adjust, and Extend Current Wisdom , 2010, SSRN Electronic Journal.

[144]  J. Collins,et al.  Financial Education and Counseling — Still Holding Promise , 2010 .

[145]  Jonathan S. Spader,et al.  The bold and the bankable: how the Nuestro Barrio telenovela reaches Latino immigrants with financial education. , 2009 .

[146]  S. Danes,et al.  Teen Financial Knowledge, Self-Efficacy, and Behavior: A Gendered View , 2007 .

[147]  Justine S. Hastings,et al.  Financial Literacy, Financial Education and Economic Outcomes , 2012, Annual review of economics.

[148]  Janet C. Bechman,et al.  Cash Flow Management And Credit Use: Effect Of A Financial Information Program , 1996 .

[149]  Daniel Schneider,et al.  Financially Fragile Households: Evidence and Implications , 2011 .

[150]  A. Lusardi.  Financial Education and the Saving Behavior of African-American and Hispanic Households , 2007 .

[151]  D. Robinson,et al.  What Does Financial Literacy Training Teach Us? , 2010 .

[152]  Sameer Khatiwada,et al.  Do Financial Education Programs Work? , 2008 .

[153]  Ken Rebeck,et al.  The Effects of Financial Education on the Financial Knowledge of High School Students , 2010 .

[154]  What Will My Account Really Be Worth? an Experiment on Exponential Growth Bias and Retirement Saving , 2012 .

[155]  M. Schug,et al.  Can Charter Schools Improve Financial and Economic Education? The Case of Milwaukee Urban League Academy of Business and Economics , 2004 .

[156]  Annamaria Lusardi,et al.  Financial literacy around the world: an overview , 2011, Journal of Pension Economics and Finance.

[157]  Bilal Zia,et al.  Prices or Knowledge? What Drives Demand for Financial Services in Emerging Markets? , 2010 .

[158]  R. Levine,et al.  Financial Literacy: What Works? How Could it Be More Effective? , 2010 .

[159]  A. Lusardi,et al.  New Ways to Make People Save: A Social Marketing Approach , 2009 .

[160]  Shawn Cole,et al.  High School Curriculum and Financial Outcomes: The Impact of Mandated Personal Finance and Mathematics Courses , 2016, The Journal of Human Resources.

[161]  Lori A. Koenig.  Financial Literacy Curriculum: The Effect on Offender Money Management Skills. , 2007 .

[162]  Tetsushi Sonobe.  Assessing the Impacts of Management Skill Training in Ghana and Kenya February 2010 , 2010 .

[163]  John M. Barron,et al.  Is Technology-Enhanced Credit Counseling as Effective as In-Person Delivery? , 2011 .

[164]  S. Danes,et al.  Financial planning curriculum for teens: Impact evaluation , 1999 .

[165]  N. Fiala,et al.  When Can Financial Education Affect Savings Behavior? Evidence from a Randomized Experiment among Low Income Clients of Branchless Banking in India , 2014 .

[166]  Dean S. Karlan,et al.  Teaching Entrepreneurship: Impact of Business Training on Microfinance Clients and Institutions , 2006, Review of Economics and Statistics.

[167]  D. A. Walsh,et al.  CHALLENGES OF TRAINING PRE‐RETIREES TO MAKE SOUND FINANCIAL PLANNING DECISIONS , 1998 .

[168]  A. Lusardi.  Saving and the Effectiveness of Financial Education , 2003 .

[169]  Soyeon Shim,et al.  Financial Education, Financial Knowledge and Risky Credit Behavior of College Students , 2010 .