Descriptive Bibliography

Baker,
C. and D. Dylla (2007). “Analyzing the
Relationship Between Account Ownership and Financial Education.” New America
Foundation.

Abstract: Account ownership and financial knowledge are
understood to be critical components of financial stability and wealth
accumulation. Presumably, combining financial education and accounts reinforces
the positive effects of each on the other and enhances the recipient’s
financial well being. To date, however, no testing of this hypothesis has been
undertaken. This report sets out to do that. It presents a review of programs
across the country that combine account ownership with financial education to
analyze their relationship and the impact that each component has on the other
to inform financial service and education policies for lower-income individuals
and families. Based on the findings of the research that was conducted, it
appears that financial education and accounts have an iterative relationship,
whereby each leads to consumers seeking more of the other. Combining financial
education and accounts seems to have a number of positive effects for some
consumers.

Baron-Donovan,
C., R. Wiener, K. Gross and S. Block-Lieb (2005). “Financial Literacy Teacher Training: A
Multiple-Measure Evaluation.” Financial Counseling and Planning 16
(2), 63-75.

Abstract:
This study evaluates a two-day train the trainer program designed to provide
instructors from diverse backgrounds with the tools needed to teach financial
literacy to individual debtors. Trained
teachers reported satisfaction with their training and felt prepared to teach;
they also provided constructive feedback.
Pre- and posttest questionnaires reveal a 9% increase in financial
knowledge and positive changes in attitude.
Observations reveal that skills learned in training transferred to
desired reaching behavior in the classroom.
This paper addresses the implications of our findings for both the
training literature and the implementation and operation of the recently passed
2005 bankruptcy legislation.

Borden, L., S. Lee, J. Serido and D. Collins (2008). “Changing College Students’ Financial
Knowledge, Attitudes and Behavior through Seminar Participation.” Journal of Family and Economic Issues 29
(1), 23-40.

Abstract:
This pilot study examined the influence of Credit Wise Cats, a financial
education seminar presented by Students in Free Enterprise, on the attitudes,
knowledge, and intentions toward financial responsibility of college students (N = 93).
Findings suggest that the seminar effectively increased students’ financial
knowledge, increased responsible attitudes toward credit and decreased avoidant
attitudes towards credit from pre-test to post-test. At post-test, students
reported intending to engage in significantly more effective financial behaviors
and fewer risky financial behaviors. Finally, demographic factors (e.g., gender
and employment status) predicted students’ financial knowledge, attitudes, and
behaviors. These results suggest that a seminar format may be useful in
reaching a wider audience of college students and, thus, warrants future
longitudinal evaluation.

Caskey, J. (2006). “Can Personal Financial Management Education
Promote Asset Accumulation by the Poor?” Networks Financial Institute Policy Brief 2006-PB-03.

Abstract: This paper asks whether personal
financial management education is an effective mechanism for helping
lower-income households accumulate financial assets and improve credit
histories. The paper argues that the best existing studies of the effectiveness
of financial literacy initiatives suggest that such initiatives might help
lower-income households build savings and improve credit records, but the
results are only suggestive due to the limitations of the studies. The paper
concludes that a high research priority should be to gathering more robust
evidence on whether teaching personal financial management skills to
lower-income households can be an effective means to improve their financial
situations.

 

Chang, Y. and A. Lyons
(2007). “Are Financial Education
Programs Meeting the Needs of Financially Disadvantaged Consumers?” Networks
Financial Institute Working Paper 2007-WP-02.

Abstract: This paper uses data collected from
a retrospective pre-test to investigate the impact that a financial education
program has on participants’ financial behaviors. Specifically, we compare
program impact across participants with varying levels of financial competency
prior to the program and examine whether the program is meeting the educational
needs of those it was designed to target – namely, financially disadvantaged
consumers. The findings show that the program benefited all of the participants
and the greatest improvement in financial behavior was observed for those who
reported lower levels of financial ability prior to the program. The findings
offer important practical information to consumer educators, program
developers, and financial counselors.

 

Clarke, M., M. Heaton, C.
Israelsen and D. Eggett (2005). “The
Acquisition of Family Financial Roles and Responsibilities.” Family
and Consumer Sciences Research Journal 33 (4), 321-340.

Abstract: This study was designed to assess
the modeling and teaching of adult financial roles to children and
adolescents and theimplementation of those roles in early
adulthood. The study also assessed the impact of various demographic
variables on financial role transfer. Young adults felt only
adequately taught and moderately prepared to perform financial
tasks. Financial role transfer is taking place most often from
parents in the home, rather than sources outside the home. Financial
tasks needed in teen years are modeled and taught more frequentlyand thoroughly in the home than the financial tasks needed in emerging
adulthood. Fathers modeled financial tasks more frequently than
mothers. When mothers modeled financial tasks and adolescents practiced
those tasks, frequency of performance as young adults increased and
they felt more financially prepared. Frequency of performance is
also enhanced when financial tasks are considered the responsibility
of the entire family while growing up.

 

 

Comptroller General (2004).
“The Federal Government’s Role in Improving Financial Literacy.” United States Government
Accountability Office GAO-05-93SP.

Abstract: Research has shown that many Americans
lack the knowledge of basic personal economics they need to make informed
financial judgments and manage their money effectively. On July 28, 2004, GAO
hosted a forum on the role of the federal government in improving financial
literacy. Forum participants included experts in financial literacy and
education from federal and state agencies, the financial industry, nonprofit
organizations, and academic institutions. Participants discussed the topics
federal efforts should cover, populations that should be targeted, methods of
delivering information, and the role of program evaluation. Forum participants
offered a number of suggestions regarding the federal government’s role in
improving Americans’ financial literacy. A variety of methods are needed to
deliver financial education effectively. Participants said the U.S. Department
of Education needs to deepen its commitment to financial education. Financial
literacy programs need to be evaluated. Program evaluation ideally should
assess outcomes, such as the impact on participants’ personal savings. The
federal government can facilitate others’ evaluation efforts by developing or
supporting standardized evaluation tools, serving as a national clearinghouse
for evaluation efforts, and disseminating best practices.

Danes, S. and H. Haberman (2007). “Teen Financial Knowledge, Self-Efficacy, and
Behavior: A Gendered View.” Financial Counseling and Planning 18
(2), 48-60.

Abstract: A social constructivist
perspective was taken in the current investigation of 5,329 male and female
high school students. Gender differences
were investigated in financial knowledge, self-efficacy, and behavior after
studying a financial planning curriculum.
Several gender differences before and as a result of the curriculum are
highlighted. In sum, male teens
reinforced their existing knowledge, whereas female teens learned significantly
more about finances in areas in which they were unfamiliar prior to the
curriculum.

 

Financial Literacy and Education Commission (FLEC)
(2006). Taking Ownership of the Future: The National Strategy for Financial
Literacy. Washington, DC:
FLEC.
See also “Taking
Ownership of the Future Quick Reference Guide.“

Abstract: Taking Ownership of the Future: The National Strategy for Financial
Literacy is the game plan for improving financial education in America. The strategy was called for by the Fair and
Accurate Credit Transactions (FACT) Act of 2003, which also directed the
Treasury Department to lead a group of 19 other federal agencies, officially
called the Financial Literacy and Education Commission, in an effort to help
Americans learn more about their money.
In addition, the Treasury Department issued an accompanying Quick
Reference Guide, offering a brief summary of tactics and calls to action, as
well as a list of financial education resources.

 

 

 

 

 

Fox, J., S. Bartholomae, and J. Lee (2005). “Building the
Case for Financial Education.”Journal of Consumer Affairs 39 (1),
195-214.

Abstract: The need for financial education among Americans is often
demonstrated with alarming rates of bankruptcy, high consumer debt levels, low
savings rates, and other negative outcomes that may be the result of poor
family financial management and low financial literacy levels. The collective
response by public and private organizations to the accepted and often
demonstrated need for financial education has been impressive in size and
scope. This article provides an overview of the wide range of programs aimed at
improving Americans’ financial literacy as well as a short review of the
current evidence of the effectiveness of financial education programs. We
advocate for the adoption of a comprehensive framework or approach to
evaluation to assist those currently delivering, and planning to deliver,
financial education and highlight some of the key challenges. A five-tiered
approach to program evaluation is described and outlined to provide a general
framework to guide financial education evaluation.

 

Fox, J. and S.
Bartholomae (2007). “Financial Education
and Program Evaluation.” In Xiao, J.,
Ed., Handbook of Consumer Finance
Research, 47-68. See entry under
Xiao, J.

Franklin, I.
(2004). “Financial Literacy Program Prepares Youth for Living on Their Own.” Journal of Family and Consumer Sciences 96
(1), 22-23.

Abstract: At one time, the financial
unit of a family and consumer sciences (FCS) curriculum was as simple as
looking at budgets and doing checkbook exercises. Today, the FCS financial
literacy program is a 6-week unit, designed to meet the Colorado Core Life
Management Curriculum Standard II, Managing Your Finances, and the FCS
Education National Standard 2.0. The goal for the “Life Management”
course, which supports the math and language arts curricula, is to teach skills
for living on one’s own. The ultimate goal of financial literacy overall is to
build a financially strong society of individuals and families who are
financially literate and able to make wise choices with their money. The
primary focus of the unit is to ensure that students develop the knowledge and
financial literacy skills necessary to make informed choices regarding money management,
banking, use of credit, savings and investments, insurance, and taxes. The
financial literacy program boosts math, language arts, and technology skills
while also teaching youth how to make wise choices with their money.

Godsted, D. and M. McCormick (2006).
“Learning Your Monetary ABCs: The Link between Emergent Literacy and
Early Childhood Financial Education.”
Networks Financial Institute Report 2006-NFI-03.

Abstract: Trends suggest that the current crop of parents have cause to worry
both about their own and their children’s financial futures. Parents, teachers,
school districts, boards and departments of education, and our entire nation
must come to terms with the fact that, just as with literacy generally,
students cannot afford to wait until middle or high school to begin learning
about financial literacy. Until a set of financial literacy standards are
adopted nationally, stakeholders of our educational system need to glean
teachable moments of financial literacy from existing curricula in all subject
areas. At the youngest grade levels, doing so will entail concentrating on the
baseline concepts that form the foundation for the personal financial decisions
children and, ultimately, adults must be prepared to make about building and
managing wealth.

 

Godsted, D. and M. McCormick (2007).
“National K-12 Financial Literacy Research Overview.” Networks Financial
Institute Report 2007-NFI-03.

Abstract: Personal economic issues such as credit card debt, home foreclosures,
the collapse of the subprime lending market, and escalating numbers of personal
bankruptcy have focused the nation’s attention on the importance of financial
education. Networks Financial Institute (NFI) believes that financial
independence begins in childhood with a strong foundation of skills, knowledge
and appropriate experiences. Important components of personal financial
literacy include planning, budgeting, earning, saving, managing financial risks
such as health or property events, investing, filing taxes, and the responsible
use of debt including credit cards. NFI’s national research indicates that
educators agree, identifying financial literacy as critically important and
part of their classroom activity.

 

Grody, A., D. Grody,
E. Kromann, and J. Sutliff (2008).
“A Financial Literacy and Financial Services Program for Elementary
School Grades – Results of a Pilot Study.”

Abstract: This study examines the effectiveness of teaching financial
literacy to elementary school children and extending such learning into an
age-appropriate digital world of online support services. We utilize a picture
book and a story relevant to the students ‘real life’ experiences and
conceptual understanding of future rewards. We hypothesize that using materials
geared toward developmental levels of cognitive ability and psychological
readiness will readily engage students’ understanding of delaying
gratification, saving, earning or paying interest, and other fundamentals of
personal finance. This study sought to develop a successful tool to fill the
gap in early financial education by teaching the production concepts of finance
as a mechanism to better understand the consumer components, and thereby supply
a missing foundational element for ongoing financial well-being into adulthood. We report on the first implementation of the
pilot program and speculate on the implications of the study result’s positive
outcome on future financial literacy programs in elementary school grades, and
on into secondary education levels, combining elements found in the curriculums
of math, economics and social studies. We postulate a role for financial
institutions in the reinforcement of the learning experience and, more
importantly, in the delivery of age-appropriate financial products and
services. We demonstrate an economic reward for financial institutions in
embracing child financial literacy programs in elementary school grades and in
extending the learning and implementation components through integration of age
appropriate online banking services and socialization websites.

 

Gross, K. (2005). “Financial
Literacy Education: Panacea, Palliative, or Something Worse?” St. Louis University Public Law Review 24: 307-312.

Abstract: With increasing frequency,
elementary and secondary schools, colleges, universities, community
organizations, military installations, and state and federal agencies are
developing and implementing programs designed to improve the financial
management skills of their particular constituencies. Money education is being sold as a tool for
consumer empowerment and a cure for all that ails our consumer credit economy:
financial ignorance, unhealthy debt burdens, predatory lending, mortgage
foreclosures, joblessness and susceptibility to savvy lenders and scam
artists. This approach is fundamentally
flawed. It leads to a “blame the victim”
mentality by erroneously assuming that individual knowledge acquisition alone
will produce fundamental change in the consumer financial markets, an approach
that also absolves a wide range of other
entities, public and private, from responsibility.

Hathaway, I. and S. Khatiwada
(2008). “Do Financial Education
Programs Work?” Federal Reserve Bank of Cleveland Working Paper No. 08-03.

Abstract: In this paper we provide a comprehensive critical analysis of
research that has investigated the impact of financial education programs on
consumer financial behavior. In light of the evidence, we recommend that future
programs be highly targeted towards a specific audience and area of financial
activity (e.g. homeownership or credit card counseling, etc.), and that this
training occurs just before the corresponding financial event (e.g. purchase of
a home or use of a credit card, etc.). Similarly, in light of a lack of
evidence, we also recommend that program evaluation be taken as an essential
element of any program, and that it be included in the design of the programs
before they are introduced.

 

Haynes, D. and N. Chinadle (2007). “Private Sector/Educator Collaboration:
Project Improves Financial, Economic Literacy of America’s Youth.” Journal
of Family and Consumer Sciences 99 (1), 8-10

Abstract: The Family Economics and
Financial Education Project (FEFE) began in 2001 at Montana
State University
with an annual grant from Take Charge America, Inc., a credit counseling and
debt management company headquartered in Phoenix,
Arizona. FEFE’s mission is to
provide educators with curriculum materials and training to be effective
teachers of family economics and finance. This article describes the FEFE
Project, including its core principles, history, accomplishments, and future.
The project is a highly successful example of collaboration across the private
sector and education at various levels. It serves as a national model to
educators who are working every day to improve the financial and economic
literacy of America’s
youth.

Hogarth, J. (2006).
“Financial Education and Economic Development.” Paper prepared for “Improving Financial
Literacy: International Conference Hosted by the Russian G8Presidency in
Cooperation with the OECD.”

Abstract: Logically,
financially-educated consumers should make better decisions for their families,
increasing their economic security and wellbeing. Secure families are better able to contribute
to vital, thriving communities, further fostering community economic
development. But identifying and
documenting those links is difficult.
This paper provides a snapshot of the current state of financial education
in the U.S.
as it relates to community and economic development. In the process, we look at a variety of
issues: Why is financial education important?
What is “financial education?” What financial education initiatives are
underway? Are they working – and how do we know? Data from a community development credit
union, provided as a case study, hint at the potential relationships between
financial education and community involvement and give us some hope that
financial education programs really are making a difference in communities, and
that we will some day be able to document those differences more robustly.

 

Johnson, E. and M. Sherraden (2007). “From Financial Literacy to Financial
Capability among Youth.” Journal of Sociology and Social Welfare 34
(3), 119-146.

Abstract: Youth in the United States
are facing an increasingly complex and perilous financial world. Economically disadvantaged
youth, in particular, lack financialfinancial institutions. Despite growing interest in youth financial literacy, we
have not seen comparable efforts to improve access to financial policies and services, especially among
disadvantaged youth. Instead of aiming for financial literacy, an
approach widely promoted in the United
States, we suggest aiming for financial capability, a concept grounded in the
writing of Amartya Sen and Martha Nussbaum. Building on research in the United Kingdom,
the paper proposes that financial capability results
when individuals develop financial knowledge and skills,
but also gain access to financial policies, instruments,
and services. The paper addresses theoretical and pedagogical approaches to
increasing financial capability, followed by examples of programs in the United States.
In the conclusion, we discuss implications for policy, practice, and
research.

Jump$tart Coalition.
“Annual Survey of Personal Financial Literacy among High School
Students.” 2004, 2006, 2008 available
from http://www.jumpstart.org.

For educational materials, see also
the Jump$tart Coalition Clearinghouse. The Clearinghouse uses the Educational
Materials Review Checklist as a guide in the selection of materials to be
included in the database.

 

Kozup, J. and J. Hogarth (2008). “Financial Literacy, Public Policy, and
Consumers’ Self-Protection-More Questions, Fewer Answers.” Journal
of Consumer Affairs 42 (2), 127-136.

Abstract: The article discusses
various reports published within the issue, including one that examines
organizing frameworks for effective education delivery
and environmental factors that moderate the effectiveness of programmatic
efforts as well as cases of best and worst practice, and another on how
consumers can be educated in the most effective manner to help them realize
their financial goals.

Lerman, R. and E. Bell (2006). “Financial Literacy Strategies: Where Do We
Go From Here?” Networks Financial Institute Policy
Brief 2006-PB-10.

Abstract: The evolution of market economies has dramatically
broadened the opportunities of consumers, workers, investors, and firms.
Financial services have become especially free and accessible, but also
increasingly complex. For the new financial freedom to help most people, they
must understand their choices and the likely implications of alternative
decisions. Unfortunately, many Americans have a weak grasp of basic personal
finance principles. This paper emphasizes the importance of financial literacy
in an increasingly complex market economy and examines the current state of
financial education in the U.S.
and abroad. We explore two methods of delivering financial knowledge – through
broad financial curriculums and through more focused “teachable
moments.” After examining the pros and cons of each, along with the
evidence about their effectiveness, we suggest that a combination of the two
perspectives, with the specific topics and behavioral strategies varying by
target audience. We conclude by calling for a more rigorous evaluation of the
effects of existing programs.

 

Loibl, C. (2008). “Survey of
Financial Education in Ohio’s
Schools: Assessment of Teachers, Programs, and Legislative Efforts.” Ohio
State University
P-12 Project.

Abstract: This project addressed the
scope and determinants of personal finance instruction in Ohio high schools. Through a survey, the
project identified the personal finance topics taught in Ohio high schools,
which teachers are teaching the courses, and which students attend the classes;
determined the personal finance education and knowledge of high school teachers
and their sources of information; compared legislative efforts concerning
personal finance education in Ohio to other state legislative efforts; and
conducted a meta-analysis of existing financial literacy programs and training
available to Ohio K-12 teachers.

 

Lucey, T. (2007). “The Art of
Relating Moral Education to Financial Education: An Equity Imperative.” Social
Studies Research and Practice 2 (3), 486-500.

Abstract: To achieve a fully participatory
society, all participants should receive equal opportunities for understanding
the processes of acquiring, managing, and developing financial resources. The author argues that financial education
processes do not meet the needs of all children, because they do not account
for differences in child development prompted by various economic
contexts. He contends that these
contexts prompt judgment patterns among individuals having economic differences
and that efforts toward social equity necessitate the exploration of moral
issues related to personal finance. He
recommends use of the arts to enable student discovery and reconciliation of
financial judgments so that students may construct understandings of the social
issues that prompt financial inequities and may explore ideas to challenge
them.

Lucey, T. (2005). “Assessing the
Reliability and Validity of the Jump$tart Survey of Financial Literacy.” Journal
of Family and Economic Issues 26 (2), 283-294.

Abstract: Financial education
represents an area of popular interest, owing largely to the Jump$tart surveys
of financial literacy. However, while the surveys represent indicators of
financial knowledge among high school seniors, these measures have not been
statistically validated. This article describes an assessment of the surveys’
reliability (internal consistency), and validity. It reports a moderately high
degree of consistency overall, however, discloses low to moderate internal
consistencies among subscales. It also finds significant response differences
to one quarter of comparable items between surveys. The researcher observes
challenges to affirming the surveys’ validity and offers statistics suggesting
social bias among survey items. He calls for further research into measures of
financial literacy.

 

Lucey, T. and K. Cooter (2008). Financial
Literacy for Children and Youth. Athens, GA:
Digitaltextbooks.biz.

Abstract: This book demonstrates that financial literacy needs to
become an important component of the K-12 curriculum in all U.S. schools. The authors unveil
that our schools do too little to ensure that students leave school prepared to
manage their financial lives.

Part I: Defining Financial Literacy

Introduction

1. A Case for
Consumer Studies in the Early Grades – R. Chamberlin
2. Buying More Can
Give Children Less – C. Holst
3. The Importance of
Financial Education Today – A. Greenspan
4. Financial
Literacy: Does it Matter? – L. Mandell
5. Meaning and Money
– M. Brenner
6. What Teens Want to
Know about Financial Management – K. Varcoe, S. Peterson,
C. Garrett, A. Martin, P. Rene and C. Costello
7. Elementary
Teachers’ Views on Economic Issues – M. Schug
8. Random Acts of
Financial Literacy – K. Cooter

Part
II: Instruction Issues

Introduction

9. Mathematics
and Financial Literacy: Collaboration or Conflict?
What are Mathematics Educators’
Responsibilities? – S. Maxwell
10. Improving
Financial and Economic Education: A Program for Urban Schools – M. Schug, R. Wynn II, T. Posnanski
11. Financial
Literacy and Youths in Jail – J. Christensen
12. Finance Faculty
in the Middle School Classroom: Using a Portfolio Management Project to Integrate Teaching, Research, and
Service – S. Crain, D. Goodwin, P. Herd, G. Ragan, K. Ragan
13. Teaching Young
Dogs Old Tricks: The Effectiveness of Financial Literacy Intervention in Pre-High School
Grades – L. Mandell
14. Teaching
Financial Literacy through the Arts: Theoretical Underpinnings and Guidelines for Lesson Development – J.
Laney
15. Using a Financial
Education Curriculum for Teens – K. Varcoe, A. Martin, Z.
Devitto and C. Go
16. Economic
Inequality and Secondary Mathematics – A. Brantlinger

Part III Socio-Historical Moral Connections

Introduction

17. Grasping
the Foundational Roots of Economic Perceptions: Pre-Colonial West Africa
and the Bantu – T. Lucey, D. Kruger, J. Hawkins
18. Human Rights
Violations in the Inner City: Implications for Moral Educators – E. Sparks
19. The Determinants
of Wealth and Asset Holding in Nineteen-Century Canada:
Evidence from Microdata – L. Di Matteo
20. Financial
Responsibility for the Family: The Case of Southeast Asian Refugees in Canada – P. Johnson
21. Who has a Bank
Account? Exploring Changes over Time, 1989-2001 – J. Hogarth, C. Anguelov, and J. Lee
22. Decomposing the
Black-White Wealth Gap: The Role of Parental Resources,
Inheritance, and Investment Dynamics – D. Conley
23. Variations in
Level of Moral Judgment as a Function of Type of Dilemma and Moral Choice – J. Carpendale and D. Krebs

24. Ethics and
Economics, Friends or Foes? An Educational Debate – G. Minnameier
25. Using Stories to Teach
Complex Moral Concepts to Young Children – C. Bacigalupa
26. Understanding the
Role of Community in Moral and Character Education – F. Power, A. Power and V. Khmelkov
27. Economics,
Religion, Spirituality, and Education: Encouraging Understandings of the Dimensions – T. Lucey

Epilogue

Lucey, T. and Giannangelo, D. (2006). “Short Changed: The Importance of
Facilitating Equitable Financial Education in Urban Society.” Education and Urban Society 38 (3), 268-287.

Abstract: Through this literature
review, the authors explore financial education’s relevance to urban
society. They consider research measuring children’s financial
development by observing environmental influences that affect both
financial learning and personal judgments. These conditions
necessitate financial curricula addressing associated challenges.
The authors recommend a cooperative rather than competitive
financial education curriculum. Such a framework would employ
student-centered instruction to create awareness of the societal
consequences for financially based personal judgments related to
financial differences.

 

 

Lusardi, A. (2008a). “Financial
Literacy: An Essential Tool for Informed Consumer Choice?” Joint
Center for Housing Studies, Harvard University.

Abstract: Increasingly, individuals are in
charge of their own financial security and are confronted with ever more
complex financial instruments. However,
there is evidence that many individuals are not well-equipped to make sound
saving decisions; they do not possess adequate financial literacy. This paper demonstrates widespread financial
illiteracy among the U.S.
population, particularly specific demographic groups. Those with low education, women,
African-Americans, and Hispanics display particularly low levels of
literacy. Financial literacy impacts
decision-making. Failure to plan for
retirement, lack of participation in the stock market, and poor borrowing
behavior can all be linked to ignorance of basic financial concepts. While financial education programs can result
in improved saving behavior and financial decision-making, much can be done to
improve these programs’ effectiveness.

Lusardi, A. (2006). “Financial Literacy and Financial Education: Review
and Policy Implications.” Networks Financial Institute Policy Brief 2006-PB-11.

Abstract: In recent years, as workers have gained an unprecedented degree of
control over their pensions and savings, the importance of financial literacy
and financial education has increased considerably. Large changes in the
structure of financial markets, labor markets, and demographics in developed
countries have led to this change. Consumers have a bewildering array of
complex financial products – from reverse mortgages to annuities – to choose
from, making saving decisions increasingly complex. Knowledge about the working
of compound interest rates, the effects of inflation, and the working of
financial markets is essential to make saving decisions. Several initiatives
have been undertaken to improve financial literacy. The Organization for
Economic Co-Operation and Development (OECD) comprehensively defines financial
education as “the process by which financial consumers/investors improve their
understanding of financial products and concepts and, through information,
instruction and/or objective advice, develop the skills and confidence to
become more aware of financial risks and opportunities, to make informed
choices, to know where to go for help, and to take other effective actions to
improve their financial well-being.” Building upon this definition, I provide a
review of the current state of financial literacy and financial education
programs, and discuss whether workers possess the financial literacy necessary
to process information and formulate saving plans.

 

Lusardi, A. (2008b). “Household
Saving Behavior: The Role of Financial Literacy, Information, and Financial
Education Programs.” NBER Working Paper No. W13824.

Abstract: Individuals are increasingly in charge of their own financial security
after retirement. But how well-equipped are individuals to make saving
decisions; do they possess adequate financial literacy, are they informed about
the most important components of saving plans, do they even plan for
retirement? This paper shows that financial illiteracy is widespread among the U.S.
population and particularly acute among specific demographic groups, such as
those with low education, women, African-Americans, and Hispanics. Moreover,
close to half of older workers do not know which type of pensions they have and
the large majority of workers know little about the rules governing Social
Security benefits. Notwithstanding the low levels of literacy that many
individuals display, very few rely on the help of experts or financial advisors
to make saving and investment decisions. Low literacy and lack of information
affect the ability to save and to secure a comfortable retirement; ignorance
about basic financial concepts can be linked to lack of retirement planning and
lack of wealth. Financial education programs can help improve saving and
financial decision-making, but much more can be done to improve the
effectiveness of these programs.

 

Lusardi, A., Ed. (2008c).
Overcoming the Saving Slump: How
to Increase the Effectiveness of Financial Education and Savings Programs. Chicago: U of Chicago, P.
2008 (forthcoming).

Abstract: The great majority of
working Americans are unprepared to face the difficult task of planning for
retirement. In fact, the personal savings rate has been holding steady at zero
for several years, down from 8 percent in the mid-1980s. Overcoming the
Saving Slump explores the many challenges facing workers in the transition
from a traditional defined benefit pension system to one that requires more
individual responsibility, analyzing the considerable impediments to saving and
evaluating financial literacy programs devised by employers and the government.
Mapping the changing landscape of pensions and the rise of defined contribution
plans, Annamaria Lusardi and others investigate new methods for stimulating
saving and promoting financial education drawing on the experience of the United States as well as countries that have
privatized their welfare systems, including Sweden
and Chile.
This timely volume pinpoints where human resources departments, the financial
industry, and government officials have succeeded-or failed-in bridging the way
to a new retirement system. As the workforce ages and more pensions disappear
each second, Lusardi’s findings will be invaluable for economists and anyone
facing retirement.

 

Lyons, A., L. Palmer, K. Jayaratne, and E. Scherpf
(2006a). “Are We Making the Grade? A
National Overview of Financial Education and Program Evaluation.” Journal of Consumer Affairs 40 (2),
208-235.

Many financial education providers still do not have a basic level of evaluation
capacity and are unable to identify program outcomes and design effective
evaluation instruments. It is difficult to propose a national evaluation
strategy without a basic understanding of current evaluation capacity and of
the critical gaps in program evaluation. In addition, there has been little
discussion about the challenges facing financial professionals and educators
who are on the “front lines” delivering and evaluating programs. The
purpose of this survey article is to address these critical gaps in the
literature and to provide an overview of the current state of financial
education and program evaluation. Using qualitative and quantitative data
collected from financial professionals and educators nationwide, this study
provides insight into what can be done to build national evaluation capacity
and conduct more effective program evaluations.

 

Lyons, A. (2005). “Financial Education and Program
Evaluation: Challenges and Potentials for Financial Professionals.” Journal
of Personal Finance 4 (4), 56-68.

Abstract: The objectives of this
article are threefold: (a) to provide an overview of current evaluation
methods, (b) to discuss the challenges financial professionals face in
conducting more rigorous program evaluations, and (c) to identify the
potentials for improving existing efforts by making recommendations as to how
the financial education professional can realistically overcome these
challenges and conduct more effective program evaluations. Improving program evaluation results in
better programs and initiatives, which in turn lead to an overall improvement in
the financial wellbeing of families and the economic vitality of their
communities.

Lyons, A. and U. Neelakantan (2008). “Potential and Pitfalls of Applying Theory to
the Practice of Financial Education.” Journal of Consumer Affairs 42 (1),
106-112.

Abstract: Researchers are increasingly using interdisciplinary theory to bring
rigor to the practice of financial education. Practitioners often do not see
the value of the theory because it does not coincide with their observations of
how people behave, and researchers do not yet have enough experience with
interdisciplinary theory to demonstrate its usefulness to practitioners. If
carefully applied, theory can be used to set appropriate financial goals and to
positively change consumers’ financial behaviors. Better communication can bridge
the gap between theory and practice to the benefit of the consumer.

 

Lyons, A., Y. Cheng
and E. Scherpf (2006b). “Translating
Financial Education into Behavior Change for Low-Income Populations.” Financial
Counseling and Planning 17 (2), 27-45.

Abstract: The impact that financial education had on the financial
behaviors of (a) the agency staff who were trained to deliver the program and
(b) the low-income individuals who participated in the program was
investigated. Specifically, the
researchers examined the relationship between total number of financial
education lessons completed, prior financial experience, and improvement in
individuals’ financial behaviors. The
results provide some evidence that financial education may result in improved
financial behaviors. However, the
findings suggest that prior level of financial experience may matter more than
the number of lessons completed.
Researchers may want to re-examine the indicators currently being used
to show program impact and whether financial knowledge is the appropriate
catalyst to foster behavior change.

 

Lyons, A., M. Rachlis, M. Staten and J. Xiao
(2006c). “Translating Financial
Education into Knowledge and Behavior Change.”
Consumer Interests Annual 52,
397-403.

Abstract: The number of financial education programs continues to
flourish. However, research measuring
the effectiveness of these programs has been more limited, primarily because of
a continued lack of understanding among financial education providers about how
to measure program impact. In general,
the empirical rigor of these studies is still far from satisfactory, and only recently
have a few studies attempted to present program impact within the context of a
theoretical framework. This paper
reviews a session held at the 2006 conference of the American Council of
Consumer Interests highlighting research related to financial education program
evaluation, summarizing each of 4 papers and some of the discussion highlights
of this conference session.

 

Mandell, L.
(2006). “Financial Literacy: If it’s So Important, Why Isn’t It Improving?’
Networks Financial Institute Policy Brief
2006-PB-08.

Abstract: Financial literacy has assumed greater importance in our society as the
result of the increasing complexity of financial products and the simultaneous
cutting of economic safety nets by government, employers and even parents who
worry about their own retirements. If the problem isn’t solved and consumers
don’t look out for themselves, they may exercise a “put option” by throwing
themselves on the mercy of taxpayers when they cannot support themselves in
retirement. In addition, a lack of financial literacy may contribute to
seemingly “irrational” behavior that distorts financial markets. Measured
financial literacy scores among high school seniors is low and has even
declined since 1997. More distressing is the fact that students who take a
course in personal finance end up no more financially literate than those who
don’t. Tracking students who took such a course over a 5 year period shows no
positive impact on financial literacy, attitudes toward thrift or behavior. The
only bright spot is the stock market game which consistently increases literacy
scores, indicating that teaching should be interactive, contemporary and “fun.”

 

Mandell, L.
(2007a). “Financial Literacy of High
School Students.” In Xiao, J., Ed., Handbook of Consumer Finance Research,
163-184. See entry under Xiao, J.

 

Mandell, L.
(2008). “High School Financial
Literacy.” Forthcoming in Overcoming the Savings Slump, A.
Lusardi, Ed. See entry under Lusardi,
A.

Mandell, L. and L.
Klein (2007b). “Motivation and Financial
Literacy.” Financial Services Review 16, 105-116.

Abstract: This paper examines
the hypothesis that low financial literacy scores among young adults, even after
they have taken a course in personal finance, is related to a lack of
motivation to learn or retain these skills. The research is based upon the
latest national Jump$tart survey of high school seniors and uses financial
literacy scores after controlling for socioeconomic, demographic, and
aspirational characteristics that have historically predicted these scores. We
analyze the relation of financial literacy scores to responses to three
questions designed to measure motivation to be financially literate. We found
that the motivational variables significantly increased our ability to explain
differences in financial literacy.

 

Martin, M.
(2007). “A Literature Review on the
Effectiveness of Financial Education.” Federal Reserve Bank of Richmond Working Paper No.
07-03.

Abstract: This survey summarizes current research on financial literacy
efforts. Because most financial literacy
programs are relatively new, much of the literature reviewed here is also new
and part of a field that is still developing as a program of research. However, we can conclude that financial
education is necessary and that many existing approaches are effective. Among the findings are that some households
make mistakes with personal finance decisions; mistakes are more common for low
income and less educated households; there is a causal connection between
increases in financial knowledge and financial behavior; and the benefits of
financial education appear to span a number of areas including retirement
planning, savings, homeownership, and credit use.

Meier, S. and C.
Sprenger (2008). “Selection into
Financial Literacy Programs: Evidence from a Field Study.” Federal Reserve Bank of Boston Public Policy
Discussion Paper No. 07-5.

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.

Morton,
J. (2005). “The Interdependence of Economic and Personal Finance Education.” Social Education 69 (2), 66-70.

Abstract: In an increasingly complex financial
world, personal finance education is more important today than ever.
Nevertheless, the number of states incorporating personal finance concepts into
their academic standards is not rising significantly, and students are
demonstrating few gains, if any, in their knowledge of those concepts. One
reason for this paradox is that personal finance education does not have a home
in the American school curriculum. The natural home for personal finance
education is in the economics curriculum, which is one of the core subjects in
the No Child Left Behind law. Economics provides the organizing principles and
logic that could be the structure for personal finance education, helping to
strengthen it so that K-12 students will learn the concepts and skills of
personal finance they need to make informed choices throughout their lives.

 

National Association for State Boards of Education (NASBE) (2006). Who
Will Own Our Children: The Need for Financial Literacy Standards. Alexandria, VA:
NASBE.

Abstract: Staggering personal debt,
skyrocketing bankruptcies, and the elimination of pension plans have imperiled
the nation’s economic and social security, and called into question the ability
of American consumers to manage their financial destiny. In light of this grave
threat to individuals, families, and the country as a whole, a national call
for states to establish financial education as a core academic subject in all
grades-from Kindergarten through graduation-was made by the National
Association of State Boards of Education (NASBE). The urgent recommendation is part of a
broader list of policy proposals issued from a national commission that spent a
year scrutinizing the fiscal condition of the American family and the status of
financial education in K-12 schools.

 

 

National Council on Economic Education (2007). “Survey of the States: Economic and Personal
Finance Education in Our Nation’s Schools in 2007: A Report Card.”

Abstract: What isn’t taught isn’t learned. No longer is the question: “should we
take action on improving economic and financial literacy?” The question is ” how
will we do it?” The National Council on Economic Education (NCEE) “Report
Card,” sponsored by State Farm®, provides the only national set of data that
tracks the progress of economic and personal finance education via detailed state by state “snapshots” and
attendant data. States haven’t made enough progress on their
commitment to offer or require economic and finance education in our nation’s
schools. Consequently, the majority of students aren’t receiving the essential
real-life economic skills they need to become knowledgeable consumers, prudent
savers and investors, and productive members of the workforce.

 

National Endowment for Financial Education (2004). “Motivating Americans to Develop Constructive
Financial Behaviors.” Denver, CO:
NEFE

Abstract: A group of distinguished
financial educators, researchers, behaviorists, practitioners, nonprofit
menders, and service providers from throughout the country convened in May 2003
under the sponsorship of the national Endowment for Financial Education (NEFE)
for a think tank titled “Motivating Americans to Develop Constructive Financial
Behaviors.” With the stated goals of identifying ways to inspire and maintain
positive changes in the way money is managed by individuals and families in
American households, participants examined potential approaches, messages and
media most likely to help reverse the kind of negative behaviors that have led
to potentially devastating problems, such as low savings rates, ballooning debt
load, and inadequate retirement planning.
Guided by insights and themes drawn from research papers and articles, .
. . the group examined the various barriers to changing financial behavior and
considered potential catalysts for positive change. . . . [P]articipants
developed actionable points for two primary change agents: Professionals and
individuals. For professionals,
encompassing educators, organizations and practitioners, participants created a
list of best practices; for individuals, the group generated a series of
practical, readily applicable steps for improving financial circumstances.

 

Organization for Economic Co-Operation and Development
(OECD) (2006). “The Importance of Financial Education.” Policy Brief.

Abstract: This Policy Brief looks
at the importance of financial education, and how the OECD is helping governments
achieve it. One key challenge is convincing people that they are not
as financially literate as they think they are.

 

Organization for Economic Co-Operation and Development
(OECD) (2005). Improving Financial Literacy: Analysis of Issues and Policies. Paris:
OECD.

Abstract: This book, the first
major study of financial education at the international level, contributes to
the development of consumer financial literacy by providing information to
policymakers on effective financial education programmes. It is also intended
to promote the exchange of views and the sharing of experience in the field of
financial education. It analyses financial literacy surveys in member
countries, highlights the economic, demographic and policy changes that make financial
education increasingly important, and describes the different types of
financial education programmes currently being offered in OECD countries.
Finally, this book evaluates the effectiveness of financial education
programmes and suggests actions policymakers can take to improve financial
education and awareness.

Osteen, S., G. Muske and J. Jones (2007). “Financial Management Education: Its Role in
Changing Behavior.” Journal of Extension
45 (3).

Abstract: Managing personal
finances is a crucial but difficult issue. Many writers are concerned about
whether or not Americans are prepared to handle their finances as personal debt
and bankruptcies grow. While some educators believe that financial education
can improve a family’s financial security, others question the effectiveness of
such programs. The study reported here examined the results of Money 2000^TM and
its ability to influence behavior and financial preparedness. Participants made
greater use of banks and less use of loan and check cashing services, increased
savings, and decreased debt. The data supports financial literacy training as
enhancing financial well-being.

 

 

 

Parrish, L. and L. Servon (2006a). “Policy Options to Improve Financial
Education: Equipping Families for Their Financial Futures.” New America
Foundation, Asset
Building Program.

Abstract: Financial education is
needed now because children and adults show low levels of financial education
at a time when the financial services landscape has become highly complicated
just as consumers are most responsible for making their own financial
decisions. Americans are not saving, and
bankruptcy and debt rates are growing.
Financial education initiatives should be taught at teachable moments,
starting at an early age and should address both the supply of and demand for
financial knowledge. Recommendations
include a mandated course on personal finance prior to high school graduation
and establishing a savings and investment account for every American child
born. Adults require opportunities for
financial education in conjunction with accounts; states should especially
provide financial education to TANF recipients.
Public awareness campaigns, penalties levied against predatory lenders,
workplace financial education and a Financial Services Corps for spreading
access to financial planning are further recommended.

 

 

 

Parrish, L., H. McCulloch, K. Edwards and G. Gunn
(2006b). “State Policy Options for
Building Assets.” New America Foundation

Abstract: States continue to play
an important role in helping low- and moderate-resource families save and build
wealth. New America Foundation presents
a range of ideas to broaden savings and asset ownership, from low-cost to those
requiring substantial investment, to alter longer-term outlooks and prospects
for struggling Americans, in policy areas including financial education, savings,
serving unbanked and underbanked populations, homeownership, retirement
planning., entrepreneurship, tax refunds, wealth sharing, asset limit reform
and asset protection.

Peng, T., S. Bartholomae, J. Fox and G. Cravener
(2007). “The Impact of Personal Finance
Education Delivered in High School and College Courses.” Journal of Family and Economic Issues 28 (2), 265-284.

Abstract: This study investigates
the impact of personal finance education delivered in high school and college.
Outcomes of interest were investment knowledge and household savings rates
measured years after the financial education was delivered. A web-based survey
with questions about participation in financial education, financial
experiences, income and inheritances, and demographic characteristics was
administered to 1,039 alumni from a large Midwestern university. Participation
in a college level personal finance course was associated with higher levels of
investment knowledge. Experience with financial instruments appeared to explain
more of the variance in both investment knowledge and savings rates. No
significant relationship between taking a high school course and investment
knowledge was found. Financial experiences were found to be positively
associated with savings rates.

 

Risinger, C. (2005). “Teaching Consumer Literacy with the
Internet.” Social Education 69 (2):
96-98.

Abstract: Are you ready to hear
about another “gap” between U.S. education and education in
other nations? While surfing the internet for the sites mentioned in this
column, I found out that nations such as Finland,
Thailand, Australia, Wales,
and Northern Ireland are
doing more about preparing K-12 students to be intelligent consumers than we
are in the United States.

 

Seidman, E., K. Murrell and M. Koide (2007). “Public Policy Ideas to Improve Financial
Education and Help Consumers Make Wise Financial Decisions.” New America
Foundation, Financial Services and Education Project, Asset Building
Program.

Although the number
of financial education programs has grown over the last decade, few policies
have been enacted to evaluate, support and expand effective financial education
and increase financial capability. Although the government is not the only
entity that can help improve financial education, there is an important role
for the government sector to play that complements the efforts of the private
sector, the nonprofit sector, and the efforts of individuals to take personal
responsibility to access financial education. All levels of government can
develop policies that help prepare youth and adults to make wise financial
decisions. This report identifies some policy ideas that were generated by
financial education experts-including practitioners, researchers, and financial
institution representatives-during the New America Foundation’s Roundtable
Meeting on March 21-22, 2007 in Washington,
D.C. The policy ideas included in this report can
improve financial education and help consumers increase their financial
capability. For the purposes of this report, financial capability can be
defined as developing the skills and confidence to be aware of financial
opportunities, to know where to go for help, to make informed choices, and to
take effective action to improve financial well-being. Financial capability
links education with appropriate products and services to make the education
relevant.

Shockey, S. and S. Seiling (2004). “Moving into Action: Application of the
Transtheoretical Model of Behavior Change to Financial Education.” Financial
Planning and Counseling 15 (1), 1-12.

Abstract: This study used the
Transtheoretical Model of Behavior Change to assess change in financial
behavior over a 4-week period among participants enrolled in an IDA financial
education program. All six money
management behavior means increased.
Participants who advanced at least one stage are expected to double
their chances of taking action on their new behavior.

 

Suiter, M. and B. Meszaros (2005). “Teaching about Saving and Investing in the
Elementary and Middle School Grades.” Social
Education 69 (2), 92-95.

Abstract: For several years,
advocacy groups have recognized the need to strengthen financial education in
the K-12 schools. Current statistics support their concerns. Financial
illiteracy in the United
States is astoundingly high. From 1992 to
2000, disposable personal income for Americans rose by 47 percent, but personal
spending rose by 61 percent. In those eight years, the overall personal savings
rate fell from nearly 6 percent to zero. Half of all Americans today are living
paycheck to paycheck. Fifty percent of all adults have not started saving for
retirement. For many Americans, unpaid credit card balances exceed 401(k)
balances. These are but a few of the statistics that point out the importance
of preparing young people to manage their personal finances intelligently.

 

 

Thaler, R. and C. Sunstein (2008). Nudge:
Improving Decisions About Health, Wealth and Happiness. New
Haven: Yale UP.

Abstract: Every day, we make
decisions on topics ranging from personal investments to schools for our
children to the meals we eat to the causes we champion. Unfortunately, we often
choose poorly. The reason, the authors explain, is that, being human, we all
are susceptible to various biases that can lead us to blunder. Our mistakes
make us poorer and less healthy; we often make bad decisions involving
education, personal finance, health care, mortgages and credit cards, the
family, and even the planet itself. Thaler and Sunstein invite us to enter an
alternative world, one that takes our humanness as a given. They show that by
knowing how people think, we can design choice environments that make it easier
for people to choose what is best for themselves, their families, and their
society. Using colorful examples from the most important aspects of life,
Thaler and Sunstein demonstrate how thoughtful “choice architecture” can be
established to nudge us in beneficial directions without restricting freedom of
choice. Nudge offers a unique new take, from neither the left nor the right, on
many hot-button issues, for individuals and governments alike.

 

 

 

Valentine, G. and M. Khayum (2005). “Financial Literacy Skills of Students in
Urban and Rural High Schools.” Delta Pi Epsilon Journal 47 (1), 1-9.

Abstract: In the past decade, a
growing number of studies have established considerable deficiencies in
financial literacy among students and adults in the United States. The purpose of this paper is to further
examine the relationship between the nature of economic socialization of high
school students in urban and rural schools and their financial literacy at
aggregate and disaggregated levels based on the scores of high school students
on a personal finance quiz and the students’ demographic characteristics.

Varcoe, K., A. Martin, Z. Devitto, and C. Go (2005). “Using a Financial Education Curriculum for
Teens.” Financial Counseling and Planning 16 (1), 63-71.

Abstract: Many researchers have
studied and documented the financial literacy of youth. Even more have developed educational programs
or curricula to teach them financial and consumer issues; however,. Few have
actually evaluated the effectiveness of their programs. The Money
Talks: Should I Be Listening? Curriculum, developed by a Cooperative
Extension team, was created for teenagers to address what they want to learn
about using money. A goal of the team who created Money Talks was to evaluate the effectiveness of the curriculum for
changing the financial knowledge and behavior of teens. This paper presents research findings from
pre- and post-test evaluations to ascertain changes in financial knowledge
and/or behavior of participants.

 

Wagland, Suzanne (2006).
“Financial Literacy in the Context of Literacy in General.” University
of Western Sydney, Australia.

Over recent
decades, the concept of literacy has developed to meet the challengers and demands of
the 21 century. In addition to reading and writing, individuals require skills
to manage new technologies and the seemingly endless amount of information
available. The need to be literate is particularly relevant in the area of
personal finance. Over the last two decades, there has been an identifiable
shift in most developed nations giving individuals greater responsibility for
their own financial wellbeing and long term retirement planning. In response,
the financial industry has created new products and services offering greater
choice and flexibility in how individuals can manage their funds, but also
increasing the complexity with which individuals have to cope. If individuals are to be literate and, in
particular, financially literate in the 21 century, they require three
essential skills: First, the skills to seek relevant information; second the
skills to critically evaluate this information; and third, the skills to
utilize this information to make beneficial decisions and solve problems. This
paper will first discuss this concept of literacy as it has been developed for
information literacy and then use this concept to look at financial literacy.
Against this background, the paper will then discuss some issues related to
developing financial literacy in Australia.

 

Willis, L. (2008). “Against
Financial Literacy Education.” University
of Pennsylvania Law School.
Scholarship at Penn Law. Paper
208.

Abstract: The dominant model of
regulation in the United
States for consumer credit, insurance, and
investment products is disclosure and unfettered choice. As these products have
become increasingly complex, consumers’ inability to understand them has become
increasingly apparent, and the consequences of this inability more dire. In
response, policymakers have embraced financial literacy education as a
necessary corollary to the disclosure model of regulation. This education is
widely believed to turn consumers into “responsible” and “empowered” market
players, motivated and competent to make financial decisions that increase
their own welfare. The vision is of educated consumers handling their own
credit, insurance, and retirement planning matters by confidently navigating
the bountiful unrestricted marketplace. Although the vision is seductive,
promising both a free market and increased consumer welfare, the predicate
belief in the effectiveness of financial literacy education lacks empirical
support. Moreover, the belief is implausible, given the velocity of change in
the financial marketplace, the gulf between current consumer skills and those
needed to understand today’s complex non-standardized financial products, the
persistence of biases in financial decision-making, and the disparity between
educators and financial services firms in resources with which to reach
consumers. Harboring this belief may be innocent, but it is not harmless; the
pursuit of financial literacy poses costs that almost certainly swamp any
benefits. For some consumers, financial education appears to increase
confidence without improving ability, leading to worse decisions. When
consumers find themselves in dire financial straits, the regulation through
education model blames them for their plight, shaming them and deflecting calls
for effective market regulation. Consumers generally do not serve as their own
doctors and lawyers and for reasons of efficient division of labor alone,
generally should not serve as their own financial experts. The search for
effective financial literacy education should be replaced by a search for
policies more conducive to good consumer financial outcomes.

Willis, L. (2008). “Evidence and Ideology in Assessing the Effectiveness of
Financial Literacy Education.” U of Pennsylvania Law School,
Public Law Research Paper No. 08-08; Loyola-LA Legal Studies Paper No. 2008-06.

Abstract: Financial literacy education has long
been promoted as key to consumer financial well-being. Yet the claim has never
had more than negligible statistically significant empirical support. This
review (1) sets forth the model of financial literacy education underlying public
support for these programs today, (2) identifies pervasive and serious
limitations in existing empirical research used by policymakers as evidence of
the effectiveness of this education, and (3) recommends a number of alternative
public policies suggested by the existing research.

Xiao, J., Ed. (2007).
Handbook of Consumer Finance
Research. NY: Springer Publishing.

Abstract: Debt consolidation; pension givebacks;
Social Security under siege; bankruptcies and foreclosures; Americans’ financial
lives are fraught with issues, challenges, and potential threats, in record
numbers. The Handbook of Consumer Finance Research surveys the social
aspects of consumer behavior, offering latest data and original research on
current consumer needs as well as identifying emerging areas of research. This
volume starts with current concepts of risk tolerance, consumer socialization,
and financial well-being, and moves on to salient data on specific settings and
populations, including: Healthcare spending and retirement savings; Online
shopping and e-banking; Family finances: marriage, parent/child communications,
student spending; Financial concerns of special groups: minorities, seniors,
the poor; Management issues of business-owning families; Consumer protection in
fair lending. Given the current climate of rising debt and negative savings,
the Handbook is timely and instructive reading for educators, researchers, and
policymakers who wish to develop or evaluate financial education programs,
design research initiatives, and understand better how to help families with
the economic problems of our times. It can also serve as a graduate text in
economics, finance, consumer science, business, and family studies.