Research on Financial Education and Financial Literacy


Overviews of Approaches to Financial Education

Braunstein, Sandra and Carolyn Welch. 2002. "Financial Literacy: An Overview of Practice, Research and Policy." Federal Reserve Bulletin. The Federal Reserve Board: Washington, D.C. Available online at:
www.federalreserve.gov/pubs/bulletin/2002/1102lead.pdf

Cakebread, Caroline. 2006. "Investor Education in Canada: Towards A Better Framework" Task Force to Modernize Securities Legislation in Canada. Investment Dealers Association of Canada: Toronto, Ontario. Available online at:
http://www.tfmsl.ca/docs/V3%285%29%20Cakebread.pdf

OECD. 2005. Improving Financial Literacy: Analysis of Issues and Policies. OECD Centre: Paris, France. This study can be purchased from the OECD's website at:
www.oecd.org/document/28/0,2340,en_2649_33761_35802524_1_1_1_1,00.html

Vitt, Lois, Gwen M. Reichbach, Jamie L. Kent, Jurg K. Siegenthaler. 2005. "Goodbye to Complacency: Financial Literacy Education in the U.S.: 2000-2005." Institute for Socio Financial Studies: Middleburg, VA. Report presented at the 2005 US-UK Dialogue on Pensions, sponsored by the AARP Global Aging Program in association with the British Embassy in the United States, the Employee Benefit Research Institute and the UK Department for Work and Pensions: Washington, D.C. Report is available online at:
research.dwp.gov.uk/asd/asd5/rports2005-2006/rrep239.pdf

Zarate, Milko and Jose A Bezada. 2016. "Proteccion al Inversionista en la Marco de IOSCO." Capitales Magazine. Superintendencia del Mercado de Valores: Lima, Peru. Available online at: http://www.ifie.org/docs/Procapitales.pdf

Financial Education for Children and Young Adults

Australian Securities and Investment Commission (ASIC). 2003. "Financial Literacy in Schools." ASIC Discussion Paper. Found online at:
www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/FinLit_schools_DP.pdf/$file/FinLit_schools_DP.pdf

Bernheim, Douglas, Daniel M. Garrett, and Dean Maki. 1997. "Education and Saving: The Long-Term Effects of High School Financial Curriculum Mandates". NBER Working Paper No. 6085, National Bureau of Economic Research, Cambridge, MA. Found online at:
www-econ.stanford.edu/faculty/workp/swp97012.pdf

England, Jude and Papiya Chatterjee. 2005. "Financial Education: A Review of Existing Provision in the UK." Department for Work and Pensions, Research Report No. 275. Found online at:
www.dwp.gov.uk/asd/asd5/rports2005-2006/rrep275.pdf

Financial Services Authority. 2005. "Young People (18-24) and Their Financial Information Needs". Consumer Research 44. Found online at:
www.fsa.gov.uk/pubs/consumer-research/crpr44.pdf

Financial Services Authority. 2005. "Helping Young Adults To Become Financially Capable: Case Studies of Organizations Assisting Young Adults to Take Control of Their Finances. Found online at:
www.fsa.gov.uk/pubs/other/young_adults.pdf

Financial Services Authority. 2004. "Financial Capability: Consumers' Views on Developing their Financial Capability through Schools and Workplaces." Consumer Research 27. Found online at:
www.fsa.gov.uk/pubs/consumer-research/crpr27.pdf

U.S. Department of the Treasury, Office of Financial Education. 2002. Integrating Financial Education Into School Curricula: Giving America's Youth the Educational Foundation for Making Effective Financial Decisions Throughout Their Lives by Teaching Financial Concepts as Part of Math and Reading Curricula in Elementary, Middle, and High Schools. A White Paper. Available online at:
www.eric.ed.gov/ERICWebPortal/search/detailmini.jsp?_nfpb=true&_&ERICExtSearch_SearchValue_0=ED471873&ERICExtSearch_SearchType_0=no&accno=ED471873

Financial Education in the Workplace

Bayer, P.J., D. Bernheim and K. Scholz. 1996. "The Effects of Financial Education in the Workplace: Evidence from a Survey of Employers". NBER Working Paper No.5655, National Bureau of Economic Research. Found online at:
www-econ.stanford.edu/faculty/workp/swp96011.pdf

Bernheim, Douglas and Daniel M. Garrett. 1996. "The Determinants and Consequences of Financial Education in the Workplace: Evidence from a Survey of Households." NBER Working Paper No. 5667. National Bureau of Economic Research. Online at:
www-econ.stanford.edu/faculty/workp/swp96007.pdf

Financial Services Authority. 2004. "Financial Capability: Consumers' Views on Developing their Financial Capability through Schools and Workplaces." Consumer Research 27. Found online at:
www.fsa.gov.uk/pubs/consumer-research/crpr27.pdf

Garman, Thomas. 1997. "Personal Finance Education for Employees: Evidence on the Bottom Line Benefits." Financial Counseling and Planning, Vol. 8, No. 2. Found online at:
www.creditresolution.org/files/46.pdf

Garman, E. Thomas, Daniel Young and Harry Love. 2000. "Successes in Workplace Financial Education." Consumer Interest Annual, vol. 46. Found online at:
www.faircredit.org/files/65.pdf

Gramlich, Edward. 2004. "Workplace Financial Education". Remarks made at the second meeting of the Financial Literacy and Education Commission, Washington, D.C. Found online at:
www.federalreserve.gov/BoardDocs/Speeches/2004/20040520/default.htm

Lusardi, Annamaria. 2004. "Saving and the Effectiveness of Financial Education", Pension Research Council Working Paper No. 2003-14. The Wharton School: University of Pennsylvania, Philadelphia. Found online at:
www.dartmouth.edu/~lusardiworkshop/Papers/Lusardi_bookchapter3.pdf

Financial Education and Retirement Savings

Agnew, Julie and Lisa Szykman. 2005. Asset Allocation and Information Overload: The Influence of Information Display, Asset Choice and Investor Experience." The Journal of Behavioral Finance, Vol. 6, No. 2. Found online at:
www.dartmouth.edu/~lusardiworkshop/Papers/JPFM0602pp57-70.pdf

Ameriks, John, Andrew Caplin, John Leahy. 2002. "Wealth Accumulation and the Propensity to Plan," Quarterly Journal of Economics, Vol. 118, No. 3. Available for purchase at:
papers.ssrn.com/sol3/papers.cfm?abstract_id=310467

Bernheim, Douglas D. 1998. "Financial Illiteracy, Education, and Retirement Saving". In Living with Defined Contribution Pension Systems, edited by Olivia Mitchell and Sylvester Schieber. Philadelphia: University of Philadelphia Press.

Choi, James, David Laibson, Bridgitte Madrian and Andrew Metrick. 2002. "Defined Contribution Plans: Plan Rules, Participant Decisions and the Path of Least Resistance." Pension Research Council Working Paper 2002-3. The Wharton School: University of Pennsylvania, Philadelphia. Available online at:
www.nber.org/papers/8655

Chan, Seven and Ann Huff Stevens. 2003. "What You Don't Know Can't Help You: Pension Knowledge and Retirement Decision Making". Mimeo, New York University. Available online at:
papers.ssrn.com/sol3/papers.cfm?abstract_id=481456

Clark, R. and S. Schieber. 1998. "Factors Affecting Participation Rates and Contribution Levels in 401K Plans". In Living with Defined Contribution Plans, edited by Olivia Mitchell and S. Schieber, Philadelpia: University of Pennsylvania Press.

Clark, Robert L., Madeleine B. d'Ambrosio, Ann McDermed and Kshama Sawant. 2004. 2003. "Financial Education and Retirement Savings". TIAA-CREF Institute Working Paper 11-020103. . Found online at:
www.federalreserve.gov/communityaffairs/national/CA_Conf_SusCommDev/pdf/clarkrobert.pdf

Clark, Robert L., Madeleine B. d'Ambrosio, Ann McDermed and Kshama Sawant. 2004. "Sex Differences, Financial Education and Retirement Goals". In Pension Design and Structure: New Lessons from Behavioral Finance, edited by Olivia Mitchell and Stephen Utkus. Oxford: Oxford University Press.

Duflo, Ester and Emmanuel Saez. 2003. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," NBER Working Paper 8885, National Bureau of Economic Research. Found online at:
papers.ssrn.com/sol3/papers.cfm?abstract_id=307122

Duflo, Ester and Emmanuel Saez. 2004. "Implications of Information and Social Interactions for Retirement Saving Decisions". In Pension Design and Structure: New Lessons from Behavioral Finance, edited by Olivia Mitchell and Stephen Utkus. Oxford: Oxford University Press.

Financial Services Authority. 2004. Retirement Planning for the Over 50's." Found at:
www.fsa.gov.uk/pubs/other/fincap/retirement.pdf

Goldstein, Daniel G., Johnson, Eric J. and Sharpe, William F. 2006. "Measuring Consumer Risk-Return Tradeoffs". Mimeo. Available online at:
papers.ssrn.com/sol3/papers.cfm?abstract_id=819065

Green, Emma and Clarissa White. 2005. "Effective Means of Conveying Messages about Pensions and Saving for Retirement." UK Department for Work and Pensions Research Paper No. 230. Available online at:
research.dwp.gov.uk/asd/asd5/report_abstracts/rr_abstracts/rra_239.asp
resources/03_effective_means_of_conveying_messages.pdf

Gustman, Alan and Tom Steinmeier. 2004. "What People Don't Know About Their Pensions and Social Security." In Private Pensions and Public Policies, edited by William Gale, John Shoven and Mark Warshawsky. Brookings Institution: Washington, D.C.

Hilgert, M. and J. Hogarth. 2003. "Household Financial Management: The Connection Between Knowledge and Behavior." Federal Reserve Bulletin, Washington, D.C. Found online at:
www.federalreserve.gov/pubs/bulletin/2003/0703lead.pdf

Iyengar, S., W. Jian and G. Huberman. 2003. "How Much Choice is Too Much: Contributions to 401(k) Retirement Plans". Pension Research Council Working Paper 2003-20. The Wharton School, University of Pennsylvania. Found online at:
www.dartmouth.edu/~alusardi/Papers/Lusardi_pdf.pdf

Lusardi, Annamaria. 2003. "Planning and Saving for Retirement". Working Paper, Dartmouth College. Found online at:
www.dartmouth.edu/~alusardi/Lusardi_pdf.pdf

Lusardi, Annamaria and Olivia Mitchell. 2006. "Financial Literacy and Planning: Implications for Retirement Wellbeing", Pension Research Council Working Paper 2006-1, The Wharton School, University of Pennslyvannia, Philadelpia, PA. Found online at:
www.dartmouth.edu/~alusardi/Papers/FinancialLiteracy.pdf

MacFarland, Donna M., Carolyn D. Marconi, and Stephen P. Utkus. 2004. "Money Attitudes and Retirement Plan Design: One Size Does Not Fit All". In Pension Design and Structure: New Lessons from Behavioral Finance, edited by Olivia Mitchell and Stephen Utkus. Oxford: Oxford University Press.

B. Madrian, Brigitte and Dennis Shea. 2000. "The Power of Suggestion: Inertia in 401(k) Participation and Savings Behavior." Quaterly Journal of Economics, Vol. 116, No. 4. Available online at:
papers.ssrn.com/sol3/papers.cfm?abstract_id=223635

Mastrobuoni, Giovanni. 2006. "Do Better Informed Workers Make Better Retirement Choices: A Test Based on the Social Security Statement". Princeton University, mimeo. Found online at:
econpapers.repec.org/paper/ccawpaper/51.htm

Mitchel, Olivia S. and Gary R. Mottola, Stephen P. Utkus, and Takeshi Yamaguchi. 2006. "The Inattentive Participant: Portfolio Trading Behavior in 401(k) Plans." Pension Research Council Research Paper 2006-5, Wharton School, University of Pennsylvania. Found online at:
knowledge.wharton.upenn.edu/papers/1308.pdf

Saliterman, Victor and Barry G. Sheckley, 2003. "Adult Learning Principles and Pension Participant Behavior." Pension Research Council Working Paper 2003-17. The Wharton School, University of Pennsylvania. Found online at:
http://benefitslink.com/links/20031113-025337.html

Gary W. Selnow, Gary W. 2003. "Motivating Retirement Planning: Problems and Solutions." Pension Research Council Working Paper 2003-7. The Wharton School, University of Pennsylvania. Found online at:
benefitslink.com/links/20031029-025038.html

Thaler, R. and S. Benartzi. 2001. "Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving". Graduate School of Business Working Paper, University of Chicago, Chicago. Found online at:
karlan.yale.edu/fieldexperiments/pdf/Thaler%20and%20Benartzi_Save%20More%20
Tomorrow%20Using%20Behavioral%20Economics%20to%20Increase%20Employee%20Saving.pdf

Venti, Steven. 2005. "Choice, Behavior and Retirement Savings". In Oxford Handbook of Pensions and Retirement Income, edited by G. Clark, A. Munnell and M. Orzsag. Oxford: Oxford University Press.

Whitehouse, Edward (2000), "Pension Reform, Financial Literacy and Public Information: A Case Study of the UK", World Bank Social Protection Discussion Paper. The World Bank: Washington, D.C. Found online at:
siteresources.worldbank.org/SOCIALPROTECTION/Resources/SP-Discussion-papers/Pensions-DP/0004.pdf

Measuring the Effectiveness of Financial Education Programs

(See also the studies cited in the Research section on Financial Literacy and Retirement Planning, many of which examine the effectiveness of various programs intended to increase retirement savings.)

Burhouse, Susan, Donna Gambrell and Angelisa Harris. 2004. "Delivery Systems for Financial Education in Theory and Practice". Federal Deposit Insurance Corporation, FYI: An Update on Emerging Issues in Banking. Found online at:
www.fdic.gov/bank/analytical/fyi/2004/092204fyi.html

Elliehausen, Gregory; Christopher Lundquist, and Michael E. Staten. 2003. "The Impact of Credit Counseling on Subsequent Borrower Credit Usage and Payment Behavior" (presentation given at a Federal Reserve System Community Affairs Research Conference entitled "Sustainable Community Development: What Works, What Doesn't, and Why"). Federal Reserve: Washington, DC. Found online at:
www.federalreserve.gov/communityaffairs/
national/CA_Conf_SusCommDev/pdf/statenmichael.pdf

Hogarth, Jean and Marianne Hilgert. 2002. "Household Financial Management: The Connection between Knowledge and Behavior". Federal Reserve Bulletin (July 2003). Found online at:
http://www.federalreserve.gov/pubs/bulletin/2003/0703lead.pdf

Hirad, Abdighani and Peter Zorn. 2001. "A Little Knowledge Is a Good Thing: Empirical Evidence of the Effectiveness of Pre-Purchase Homeownership Counseling" (Mimeo). Found online at:
www.freddiemac.com/corporate/reports/pdf/homebuyers_study.pdf

Jacob, Katy, Sharyl Hudson, and Malcom Bush. 2000. "Tools for Survival: An Analysis of Financial Literacy Programs for Lower-Income Families," Woodstock Institute. Found online at:
woodstockinst.org/document/toolsforsurvival.pdf

Financial Services Authority. 2005. "Measuring Financial Capability: An Exploratory Study". Consumer Research Paper 37. Found online at:
www.fsa.gov.uk/pubs/consumer-research/crpr37.pdf

Lusardi, A. 2003. "Saving and the Effectiveness of Financial Education", Pension Research Council Working Paper No. 2003-14. The Wharton School: University of Pennsylvania, Philadelphia. Found online at:
www.dartmouth.edu/~alusardi/Papers/Financial_Education_2004.pdf

Mandell, Louis. 2005. "Financial Literacy: Does It Matter?" Mimeo. Found online at:
www.jumpstart.org

Vitt, Lois et al. 2000. Personal Finance and the Rush to Competence: Financial Literacy in the U.S. A National Field Study Commissioned and Supported by The Fannie Mae Foundation, Institute for Socio-Financial Studies: Middleburg, VA. Found online:
www.isfs.org/documents-pdfs/rep-finliteracy.pdf

National Surveys on Financial Literacy

Australia

ANZ released Australia's first national survey of adult financial literacy in May 2003. ANZ released two major research studies into adult financial literacy and the causes of financial difficulty in Australia in November 2005. These included a quantitative survey of 3,500 adult Australians that was an update on the benchmark study of adult financial in Australia conducted by ANZ in 2003. In addition, the report included a qualitative report into the causes of financial difficulty involving 160 interviews and focus groups with people who had borrowings and had experienced financial difficulty. Information on the 2005 survey and copies of the 2003 and 2005 survey results can be found at:
www.anz.com.au/aus/aboutanz/Community/Programs/FinSurvey2005.asp

France

Autorite des Marches Financiers (AMF). The French securities market regulator conducted a telephone survey of financial literacy in France in 2004, the first such survey ever carried out in France. The results of this survey, published as "L'education financiere des Francais," can be found online at:
www.amf-france.org/documents/general/5658_1.pdf

Japan

A national survey on securities savings is conducted to gain an understanding of the actual holdings of securities by households nationwide and their awareness of securities investments. The survey has been done once every three years since 1962 and 15 surveys have been conducted so far. This survey (in Japanese) can be found at:
www.jsda.or.jp/shiryo/chousa/data/index.html

United Kingdom

In November 2003, the FSA launched a new initiative to develop and implement a national strategy for financial capability. As part of this work, the FSA commissioned the Personal Finance Research Centre (PRFC) at Bristol University to develop the methodology for a baseline survey that would describe and measure the state of financial capability in the UK. This document, "Measuring financial capability: an exploratory study", is available at:
www.fsa.gov.uk/pages/about/media/notes/bn009.shtml

The FSA released its baseline survey on financial capability in March 2006. The results of the survey are found at: www.fsa.gov.uk/pubs/other/fincap_baseline.pdf. In addition, a report detailing the methodology used for the survey in the UK is available at: www.fsa.gov.uk/pubs/consumer-research/crpr47a.pdf.

Prior to the national study on financial literacy, the FSA commissioned a study of consumers' attitudes toward and behaviors regarding retirement planning. This study, "Retirement Planning for the Over 50s", was released in 2004 and can be found at: www.fsa.gov.uk/pubs/other/fincap/retirement.pdf.

United States

The FINRA Investor Education Foundation in July 2016 released data and a report on the third wave of the National Financial Capability Study (with data collected in 2015). The study shows that the financial circumstances of Americans have improved over the last several years—driven in large part by an improving economy and job market. Nearly half report no difficulty in covering their monthly expenses (48% versus 36% in 2012). However, some groups are still struggling, particularly blacks and Hispanics, those without a high school education, and women.  For example, about half of respondents with only a high school diploma or no diploma could not come up with $2,000 in an emergency compared to 18 percent for those with a college degree. Access the report here.

Absolute level of financial literacy are low—only 37 percent of respondents are considered high financial literacy, meaning they could answer four or five basic questions correctly on a five-question financial literacy quiz—and financial literacy is down slightly since 2009.  The study also found that financial education is not widely available.  Only 31 percent of the respondents said they were offered financial education at some point in their lives, and less than half of respondents said their parents or guardians taught them how to manage their finances.  So we all have more work to do.

In addition to the FINRA survey, the Securities Industry Association (SIA) commissions a biannual survey of investors' attitudes towards the securities industry, brokerage services and investing in general. Results of the most recent survey are available online at:
www.sifma.org/uploadedfiles/research/surveys/2004investorsurvey.pdf

There have also been a large number of surveys conducted on specific populations, such as school-aged children, and in specific regions. For example, the Jump$tart Coalition for Personal Financial Literacy has carried out a number of surveys on the financial literacy of high-school seniors and college students. The most recent, the "2008 National Jump$tart Coalition Survey of High School Seniors and College Students" can be found online at: www.jumpstart.org/survey.html

Speeches

21 April 2011 - IFIE Chairman Hwang's speech about investor education at IOSCO Annual Meeting