Does Mandatory Financial Education Work? Evaluating the Impacts of Mandatory Secondary School Standards on Financial Literacy
Reilly, Brandon Donald
Wei, Thomas E
Mandatory financial education has been touted as a solution for low levels of financial literacy among the American populace. Most existing research into the efficacy of these programs were complete prior to the Great Recession, or focus narrowly on long-term behaviors or the impact of enrollment in a special course. I use the National Financial Capability Study from 2009 and 2012, as well as the State Mandated Financial Education Database to complete a difference-indifference analysis as to whether or not these mandatory standards positively impact either financial literacy score or financial behaviors. I find that these standards positively impact savings and credit monitoring, but have no significant impact on financial literacy score or other financial behaviors. This conclusion, despite the mixed results, does bode well for the future of financial education. This research also solidifies existing findings as to the impact of personal characteristics, employment, and educational attainment.
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