Can a mobile-app-based behavioral intervention teach financial skills to youth? Experimental evidence from a financial diaries study

Abstract

We study the impact of a mobile-app-based behavioral intervention on youth's financial literacy and financial behavior in Peru. To maximize the chances to reach out-of-school youth, we provided access to a user-friendly budget recording tool coupled with regular enumerators' visits and the delivery of SMSs during a 27-week period. The bundled treatment had positive and significant effects on financial literacy and knowledge about prices of goods and services. The probability of saving and savings deposits were not affected, but usage of credit increased both at the extensive and intensive margins. Average treatment effects on financial literacy and behavior were driven by youth without previous exposure to financial education, suggesting that the bundled intervention prompted specific subgroups (i.e., youth with lower levels of financial knowledge) to invest more in financial literacy.