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Selection into financial literacy programs: evidence from a field study

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  • Stephan Meier
  • Charles Sprenger

Abstract

As financial literacy has been shown to correlate with good financial decisions, policymakers promote educational programs to improve individuals? financial decisions. But who selects into educational programs and who acquires information about personal finance? This paper, in a field study with more than 870 individuals, offers individuals free information about their credit reports (and credit scores). About 55 percent choose to participate in this small counseling program. To test whether those who self-select to acquire information about personal finance differ from those who do not on (normally) unobservable characteristics, we elicit time preferences, using incentivized choice experiments. Our results show that the two groups differ sharply in their discount factors: those who choose to acquire information do not discount the future as much as those who choose not to acquire information. This result has implications for financial education programs.

Suggested Citation

  • Stephan Meier & Charles Sprenger, 2007. "Selection into financial literacy programs: evidence from a field study," Public Policy Discussion Paper 07-5, Federal Reserve Bank of Boston.
    • Handle: RePEc:fip:fedbpp:07-5
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    Cited by:

    1. Annamaria Lusardi & Olivia S. Mitchell & Vilsa Curto, 2009. "Financial Literacy among the Young: Evidence and Implications for Consumer Policy," NBER Working Papers 15352, National Bureau of Economic Research, Inc.
    2. Innocenti, Stefania & Golin, Marta, 2022. "Human capital investment and perceived automation risks: Evidence from 16 countries," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 27-41.
    3. Matteo Migheli & Flavia Coda Moscarola, 2017. "Gender Differences in Financial Education: Evidence from Primary School," De Economist, Springer, vol. 165(3), pages 321-347, September.
    4. Nicholas W. Maynard & Preeti Mehta & Jonas Parker & Jeffrey Steinberg, 2012. "Can Games Build Financial Capability? Financial Entertainment: A Research Overview," Working Papers WR-963-SSA, RAND Corporation.

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    Keywords

    Financial literacy; Human behavior;

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