Does State-Mandated Financial Education Affect Financial Wellbeing?

Abstract

This paper estimates the causal effect of required high school financial education on the financial well-being of young adults. Financial well-being includes people’s subjective sense of financial management, as well as their confidence in achieving their unique financial goals. Using variation in state financial education mandates for high school students across space and time, this study shows that financial education improves financial well-being, though benefits accrue primarily to men and those who obtain college degrees. Our results suggest that individuals who end their education with a high school diploma show no improvements in subjective financial well-being at best, and benefit differentially less than their peers who go on to attend college. Instead, exposure to financial education seems to result in people without college degrees reporting they are less likely to have the things they want in life due to money. Current financial education policies and curricula may exacerbate inequalities between individuals who do and do not go on to attend college.