An evaluation of High School Financial Education

• Description of the programme:
• The study:
• Key findings:
• Points to consider:

Description of the programme:

This programme aimed to increase financial knowledge and result in better choices among 9^th grade students in high schools in Spain. Each year since 2012, about 400 high schools in Spain have voluntarily delivered a 10-hour financial education programme funded by the BdE (the Spanish Central Bank) and the CNMV (the Spanish equivalent to the Security Exchange Commission). The programme, titled ‘Finance for All’ (Finanzas para Todos), is aimed at improving financial knowledge among the population. Although the implementation varies across centres, participating students are typically 9th graders. Assuming normal progression through the educational system students complete 9th grade between the ages of 14 and 15. That particular grade was chosen to maximise the potential number of students who receive the material, as 9th grade is the last grade of compulsory schooling with few, if any, elective modules. The evaluation was conducted among 3,000 students from 78 schools. The course takes places at various times throughout the year, varying from school to school.

The study:

The evaluated population were 9th grade students in high schools applying to participate in the programme for the first time during the 2014-2015 academic year. The impact of the program in this particular set of schools is informative about how the introduction of financial literacy education affects financial behaviour. It is clearly less informative about the effects of a settled program with experienced teachers. Participating students took three financial literacy tests during the school year, at the start, mid-point and end of the financial literacy training. The financial literacy test and the survey conducted in March 2015 allowed us to compare 9th graders in treated schools to 9^th graders in control schools. 9th grade students in treated schools (i.e., students turning 15 years of age by December 2015 under normal progression) received the materials between January and March 2015; whereas 9th graders in control schools went through the course between April and June 2015. In each school, a group of 10th graders who did not receive the course was also surveyed and tested. Reseachers measured financial knowledge via standardized tests delivered in the class, including attitudes toward saving and finances elicited through short surveys to students and, finally, actual choices between current and future payments in an incentivised saving task.

Key findings:

• Students in ‘treated’ schools improved their performance in the financial literacy test by 14% of one standard deviation (i.e. by how much members of a group differ from the average value for the group).
• Treated students improved mostly on ‘banking relationships’ (scoring 3% extra correct answers, which the researchers deemed to be statistically significant). The impacts on ‘saving behaviour’ and ‘intelligent consumption’ were either small (in the first case) or too imprecise (in the case of ‘intelligent consumption’)
• The impacts on ‘saving behaviour’ or ‘intelligent consumption’ were either small (in the first case) or too imprecise (in the case of ‘intelligent consumption’).
• The percentage of students who talk to parents about economics increased.
• Participating students showed an increased willingness to choose greater future income over immediate lower income.
• A tentative conclusion is that exposure to financial literacy courses changes the distribution of attitudes in the short run. There was a fall in the fraction of students reporting little interest at home in financial matters.
• There was little difference in decision making regarding the holding of a bank account or card.
• The fraction of treated students reporting income in exchange for tasks at home increased by 4%, relative to a baseline of 27%. The fraction of students who reported working in the family business increased by 2.5% from a baseline of 6%.
• Results are consistent with the notion that financial education raises awareness among students about the value of resources and the future consequences of current choices.

Points to consider:

Methodological limitations:

• Three main forms of noncompliance were discovered through surveys and personal contact with the teachers.
  • First, one school assigned to teach the material in January-March 2015 reported having taught the course not in this second quarter, but in the third one.
  • Another treated school delivered some material prior to the pre-test.
  • A third school dropped out in February 2015 because students refused making tests.
• None of these limitations are believed to have had a significant impact on results.

Relevance:

• Due to the strength of its rationale and methodology this research project is relevant to researchers interested in the viability of high school financial education. Due its relatively large sample size and use of a control group it can be considered robust.

Generalisability/ transferability:

• The study is potentially transferable to contexts and countries similar to Spain, including Western Europe and North America.