The Effect of Financial Literacy and Financial Education on Downstream Financial Behaviors

The purpose of this project was to compare the strength of findings across studies with different designs and different kinds of statistical analyses, all exploring the same core question: What is the connection between financial literacy and the choices that people make about their finances?  For this investigation, researchers at the University of Colorado – Boulder used a meta-analysis to extract and compare findings from 188 studies that had engaged 585,168 participants. They drew data from published results and solicited additional information from study authors as needed.

Key Findings

The Amount and Timing of Financial Education Matters

When it comes to attempts at building financial literacy to shape behavior, education that closely precedes a financial decision has more impact.

Behaviors and Literacy as Measured Today Are Weakly Linked

Educational interventions and financial literacy as measured to date are only weakly linked to behaviors. Moreover, in studies that measured financial education effects on both knowledge and behavior, effects of financial education delivered through interventions were much less than financial education in comparable domains, such as workplace education or career counseling.

Findings from Past Investigations Merit Revisiting

Different types of studies have yielded such disparate results — more varied than science would predict — that we must question to what extent those differences stem from widely varying research designs and analyses.

Executive Summary

Final Research Paper

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Contacts

  • Billy J. Hensley, Ph.D.

    Director of Education

    Direct: 303-224-3505
    bjh@nefe.org

  • Greta Holtz

    Manager of Grants

    Direct: 303-224-3531
    gnz@nefe.org