Working Paper: NBER ID: w18412
Authors: Justine S. Hastings; Brigitte C. Madrian; William L. Skimmyhorn
Abstract: In this article we review the literature on financial literacy, financial education, and consumer financial outcomes. We consider how financial literacy is measured in the current literature, and examine how well the existing literature addresses whether financial education improves financial literacy or personal financial outcomes. We discuss the extent to which a competitive market provides incentives for firms to educate consumers or offer products that facilitate informed choice. We review the literature on alternative policies to improve financial outcomes, and compare the evidence to evidence on the efficacy and cost of financial education. Finally, we discuss directions for future research.
Keywords: financial literacy; financial education; economic outcomes
JEL Codes: C93; D14; D18; D91; G11; G28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| financial behaviors (G53) | financial literacy (G53) |
| financial literacy (G53) | timely bill payments (G51) |
| financial literacy (G53) | budgeting (H61) |
| financial literacy (G53) | saving (E21) |
| financial literacy (G53) | participation in retirement savings plans (J26) |
| financial literacy (G53) | financial behaviors (G53) |
| financial literacy (G53) | economic outcomes (F61) |
| financial education (G53) | financial literacy (G53) |