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Dr. Carly Urban shares insights from a recent meta-analysis of financial education experiments

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You may be aware a recent meta-analysis I did with some colleagues — Tim Kaiser, Annamaria Lusardi, and Lucas Menhoff. We look at all the experiments that randomize who did—and didn’t—receive financial education in every single experiment ever written! On average: Financial education improves financial behavior in a cost-effective way. Figure 3 from the summary of the study linked above shows that financial education improves behavior in many areas!

While these findings are interesting for the field of financial education, they say very little about what works and for whom. Many financial education experiments have been conducted on adults, so what can the overall effect tell us about youth?

Well, you’re in luck. There are many a less publicized study that my colleagues Tim Kaiser and Lucas Menhoff published in 2020 studying just that! They examine every experimental or quasi-experimental study – meaning that financial education occurred either by chance or chance.

What do they find? Financial education improves financial literacy with positive effects for elementary, middle, and high school students.

Financial education also improves financial behavior, although the authors caution that it is very difficult to measure the financial behavior of young respondents. People who are not yet financially independent have fewer behaviors that can be accurately measured, and young people often answer surveys in ways that might make their teachers or parents happy.

Training intensity suggests that additional hours of training increase financial knowledge, but diminishing returns occur after about 50 hours. Changes in financial behavior also show diminishing returns. While length can increase the number of topics covered, some may not directly improve financial knowledge or behavior, especially if they are too advanced for young people. This model cannot take into account quality of teaching.

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Earlier blog post by Dr. Carly Urban: What Happens When States Guarantee Personal Finance Courses for All High School Students?

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