Positive Research Results- Bernheim et al.

My last entry looked at the ‘negative and no correlation’ research (Tennysen & Nguyen article and Peng, Bartholomae, Fox, & Cravener article).  I put emphasis on these terms as I found when I read the articles that this wasn’t completely the case.  Both had some positive outcomes for finance education, but not all positive results.  Today I am taking time to explore an article that has been referenced over and over in the other readings I have done so far: Education and saving: The long-term effects of high school financial curriculum mandates- by Bernheim, Garrett, and Maki.  Loibl & Fisher referred to this work as a “groundbreaking study (that) reported positive effects on savings behaviour and asset building among young adults receiving financial literacy education in high school”.

The research they did was a survey given in the Fall of 1995 looking at whether state curriculum mandates for personal finance education had an effect on savings and asset building. A total of 2000 surveys were administered by telephone gathering information on household economics and demographics, household earnings, total income, self-reported rates of savings, assets and liabilities, pension coverage, employment status, and information on childhood influences of potential relevance to future financial decisions.

The study found a positive correlation between states with finance education mandates and higher levels of savings and net worth.  One of the things I found most interesting about the study was that the positive results took a few years after the implementation of the mandate to show and as time went on the results improved. “We found that we obtained stronger results in the saving rate regressions when we truncated ‘years since mandate’ at 10 years. This suggests that mandates may achieve their full effect within a 10-year time frame”.

The data in this study fits in to what I believe to be true- mandated personal finance education will have an effect on savings and net worth later in a student’s life.  I wasn’t surprised to learn that they were only able to calculate the net worth of 55% of the respondents because the others were unable to provide enough information. I don’t think a lot of adults I know would know their own finances enough to predict their own net worth either- just another reason more education at an earlier age is needed.


“Economics education is about much more than money; it provides students with a framework for making good decisions that will help them and the country.” -Alan B. Krueger, Bendheim Professor of Economics and Public Affairs, Princeton University



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