You may be aware of a recent meta-analysis I did with some colleagues—Tim Kaiser, Annamaria Lusardi, and Lukas Menkhoff. We look at all experiments that randomize who did—and did not—receive financial education across every single experiment ever written! On average: financial education improves financial behaviors in a cost-effective way. Figure 3 from the research brief linked above shows that financial education improves behaviors across many domains! 

While those findings are exciting for the financial education field, they say very little about what works and for whom. Many of the financial education experiments were done on adult populations, so what can the overall effect tell us about youth?

Well, you’re in luck. There is a much less-publicized study that my colleagues Tim Kaiser and Lukas Menkhoff published in 2020 studying just that! They investigate every experimental or quasi-experimental study—meaning financial education happened either by random assignment or by chance.    

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

Financial education also improves financial behaviors, though the authors are cautious and note that it’s very hard to measure financial behaviors for younger respondents. People who aren’t yet financially independent have fewer behaviors that can be cleanly measured, and young people often answer surveys in a way that might make their teachers or parents happy. 

The intensity of the instruction suggests additional hours of instruction increase financial knowledge, but diminishing returns set in after about 50 hours. The change in financial behavior also exhibits diminishing returns. While duration may increase topics covered, some of these may not directly improve financial knowledge or behavior—particularly if they are too advanced for youth. This model has no way to account for the quality of instruction. 

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Earlier blog post from Dr. Carly Urban: What happens when states guarantee personal finance courses for all high schoolers? 

About the Author

Carly Urban

Dr. Carly Urban is Associate Professor of Economics at Montana State University, a Research Fellow at the Institute for Labor Economics (IZA), and a research fellow at the TIAA Institute. She has a full page on her website dedicated to financial education research (https://www.carlyurban.com/home/financial-education), where most of her work has been centered on financial education in schools. This research has been published in top academic journals and covered by major news outlets. When she is not working, she usually spends her time adventuring in the mountains with her husband or her dogs, Cannon and Panda.

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