Financial Education Interventions Research Articles

English

The objective of this review article is to show the concepts and significance of financial literacy and how it can contribute to improving socio economic wellbeing, financial sector development, poverty reduction and sustainable growth in developing countries in Africa. The review covered recent literatures on financial literacy; both theoretical and empirical. The review showed that level of financial literacy is low both in developed and developing countries, but policy and academic response in developing countries in general and Africa in particular is at low level.  The results of limited empirical studies implemented to evaluate financial education programs, including those in few African countries, showed that enhancing financial literacy and personal financial decision making capabilities of people would enhance the outcome of financial inclusion and other poverty reduction initiatives for the fact financially literate people can demand and properly use beneficial financial services such as savings, microcredit, insurance.  Moreover, enhancing financial literacy is at the advantage of financial service providers and contributes to the development of a stable financial system, a sustainable economic growth. Thus, policy makers and academics in African developing countries need to understand the level of financial literacy in the population in order to devise suitable financial education and other related policy interventions to improve personal financial literacy for its benefits of enhancing individual socio economic welfare and building an inclusive financial system and sustainable economic growth. Key words: Financial literacy, concept and significance, developing countries, African.

Financial Education Interventions Targeting Immigrants and Children of Immigrants: Results from a Randomized Control Trial.

We document that immigrants in the United States differ from natives in several aspects relevant for their financial decision making. Based on these differences, we designed novel financial education materials targeted at US immigrants and their children and evaluated their effectiveness using a randomized control trial. To the best of our knowledge, this is the first rigorous evaluation of financial education programs targeted at this population. Compared to a control group, the groups that received the one-time educational intervention were more likely to correctly answer financial knowledge questions immediately after the intervention. The estimated effects of this one-time intervention on knowledge were large, but most of them faded away after six months. Moreover, we find little effect of the treatments on intended financial behavior measures, both immediately and six months later. Our results point to the efficacy of this type of educational material in informing immigrants and their children about important financial information that they are unfamiliar with, including information related to their immigrant status. However, they also suggest that a priority for future research should be to test whether repeated opportunities for learning can increase financial knowledge retention and lead to behavior change.

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).

The Role of Undergraduate Personal Finance Education in Financial Literacy, Financial Attitudes and Financial Behaviours

Among the range of policy options available to improve personal financial decision making are personal finance financial education interventions. Notwithstanding calls to expand delivery of such courses at university level, there is relatively limited evidence of their effectiveness. We provide such evidence through assessment of objective and subjective financial literacy measures, financial behaviours and financial attitudes for a sample of students completing a course relative to a control group of their peers. We isolate a positive role for course delivery and estimate a better outcome for female students. We do not find that those enrolling in the elective course do so with higher levels of financial literacy, or with better financial attitudes and behaviours. Finally, evidence does not support the view that overconfidence, due to an illusion of knowledge, is associated with completion of the course.

A randomized clinical trial of a financial education intervention with nicotine replacement therapy (NRT) for low socio-economic status Australian smokers: a study protocol.

Reducing smoking prevalence among smokers from low socio-economic status (SES) is a preventative health priority. Financial stress (e.g. shortage of money or inability to pay bills) may be a major barrier to quitting smoking. This study evaluates the efficacy of a financial education and support programme coupled with pharmacotherapy at improving cessation rates at 8-month follow-up among Australian low SES smokers (people receiving a government pension or allowance). A two-group parallel block randomized (ratio 1 : 1) open-label clinical trial (RCT) with allocation concealment will be conducted. Allocation will be concealed to interviewers at data collection-points. The study will be conducted primarily by telephone with baseline, follow-up interviews and telephone-based support sessions. Nicotine replacement therapy (NRT) delivery will be mail-based. Daily smokers who are interested in quitting smoking and are currently in receipt of government benefits (n = 1046) will be recruited through study advertisements placed in newspapers, posters placed in government social assistance agencies and Quitline telephone-based cessation support services. After completion of a baseline computer-assisted telephone interview, participants will be allocated randomly to control or intervention group using a permuted block approach. Participants in both groups will receive 8 weeks of free combination NRT plus Quitline support. Participants in the intervention group will also receive four telephone-delivered financial education and support sessions. The primary outcome measure will be prolonged abstinence (at 8-month follow-up) assessed using Russell Standard criteria and biochemically verified (urine cotinine). This is the first intervention study to evaluate the potential of co-managing financial stress as a means of enhancing smokers' capacity to quit smoking. Such an intervention may provide a scalable intervention to help low SES smokers to quit.

Testing a Measurement Model of Financial Capability Among Youth in Ghana

Youth may benefit from having enhanced financial knowledge and skills and access to financial services to help them navigate transitions to adulthood, though reliable and valid measures of youth financial capability to help assess financial education and inclusion intervention outcomes are lacking. Using survey responses from 5,451 youth ages 12–18 in Ghana, we used exploratory and confirmatory factor analysis to assess 18 survey items concerning youth financial behavior and understanding and attitudes concerning financial services. A 12‐item, group invariant scale (α = .72) with three latent factors was retained in a well‐fitting model that may help practitioners assess financial education and inclusion outcomes. We found that six items were poor indicators of youth financial capability, possibly because these items measure other constructs like numeracy, or because these items were not sufficiently assessed for developmental and cultural validity using qualitative methods like cognitive interviewing.