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Economic Education and Household Financial Outcomes during the Financial Crisis

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  • Paul W. Grimes

    (Kelce College of Business, Pittsburg State University, Pittsburg, KS 66762, USA
    College of Business, Mississippi State University, Mississippi State, MS 39762, USA)

  • Kevin E. Rogers

    (College of Business, Mississippi State University, Mississippi State, MS 39762, USA)

  • William D. Bosshardt

    (College of Business, Florida Atlantic University, Boca Raton, FL 33431, USA)

Abstract

Using cross-sectional data from a nation-wide survey of American head-of-households conducted in the spring of 2010, we examined the ameliorating effects of economic literacy on the probability of specific household financial outcomes resulting from the 2008 financial crisis and the associated Great Recession. A series of probit regressions were estimated to capture the impact of economic literacy on the probability that households experienced job loss, delinquent mortgage payments, delinquent credit card payments, delinquent auto loan payments, loss of home, and personal bankruptcy. The head-of-household’s economic literacy was measured by the level of formal education received in economics and by the score achieved on an in-survey quiz of basic economic concepts and principles. The results indicate that realized quiz scores were correlated with the mitigation of job loss, late payment behavior, and personal bankruptcy, ceteris paribus . However, the results for the impact of formal economic coursework in school were mixed.

Suggested Citation

  • Paul W. Grimes & Kevin E. Rogers & William D. Bosshardt, 2021. "Economic Education and Household Financial Outcomes during the Financial Crisis," JRFM, MDPI, vol. 14(7), pages 1-12, July.
    • Handle: RePEc:gam:jjrfmx:v:14:y:2021:i:7:p:316-:d:591277
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    References listed on IDEAS

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    Cited by:

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    2. Giovanna Paladino, 2024. "Ask a Question and Get an Answer: a Study of the Framing Effect on Financial Literacy in Italy," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 11318-11354, September.

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