The Effects of Financial Education on Short‐Term and Long‐Term Financial Behaviors

This study investigates how financial education in high school, college, or in the workplace affects the short‐ and long‐term financial behaviors of adults using the 2015 National Financial Capability Study (NFCS) data. Financial education appears to have generally insignificant effects on short‐ter...

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Bibliographic Details
Published inThe Journal of consumer affairs Vol. 53; no. 1; pp. 234 - 259
Main Authors Wagner, Jamie, Walstad, William B.
Format Journal Article
LanguageEnglish
Published Malden, USA Wiley Periodicals, Inc 22.03.2019
American Council on Consumer Interests
Blackwell Publishers Ltd
Blackwell Publishing Ltd
Subjects
Accounting departments
Adults
Analysis
Consumer behavior
Consumer behaviour
Consumers
Credit card industry
Credit cards
Credit managers
Education
Education costs
Fees & charges
Finance
Financial literacy
Financial planning
Fines & penalties
High schools
Money
Retirement
Retirement benefits
Retirement planning
Workplaces
United States
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Summary:This study investigates how financial education in high school, college, or in the workplace affects the short‐ and long‐term financial behaviors of adults using the 2015 National Financial Capability Study (NFCS) data. Financial education appears to have generally insignificant effects on short‐term behaviors for which there is regular feedback and penalties, and thus greater opportunity for learning by doing. If consumers do not pay off their credit card bill, they get a monthly statement showing interest charges and penalties. Financial education appears to have more positive and stronger effects on long‐term behaviors with less timely feedback, and for which the adverse consequences are not fully realized until later in life, so learning by doing may not work. Not saving enough money for retirement cannot be easily or quickly corrected, if at all. The benefits to financial education may differ based on the time horizon for the financial behaviors.
ISSN:0022-0078
1745-6606
DOI:10.1111/joca.12210