Does Financial Education Impact Financial Literacy and Financial Behavior, and If So, When?

TLDR

To assess the impact of financial education on financial behavior and literacy through a meta‑analysis of 126 impact evaluation studies. The study finds that financial education significantly improves financial behavior and literacy, with stronger effects in randomized trials but varying by income level and context; effectiveness is lower for low‑income clients, low‑ and lower‑middle‑income economies, debt management, and mandatory programs, and is enhanced by higher intensity and timing at a teachable moment.

Abstract

Abstract In a meta-analysis of 126 impact evaluation studies, we find that financial education significantly impacts financial behavior and, to an even larger extent, financial literacy. These results also hold for the subsample of randomized experiments (RCTs). However, intervention impacts are highly heterogeneous: financial education is less effective for low-income clients as well as in low- and lower-middle–income economies. Specific behaviors, such as the handling of debt, are more difficult to influence and mandatory financial education tentatively appears to be less effective. Thus, intervention success depends crucially on increasing education intensity and offering financial education at a “teachable moment.”