My dissertation examines if state-mandated financial education improves debt-related and college-going behaviors among economically vulnerable young adults. Young adults are more likely to be exposed to state-mandated financial education, yet are more likely to engage in adverse behaviors such as payday borrowing and sub-optimally financing postsecondary education. I employ a difference-in-differences approach to exploit cross-state and consumer-age (or student-cohort) variation in financial education mandates to detect causal effects in the aforementioned behaviors. Overall, I find that exposure to personal finance course requirements reduces engaging in adverse behaviors — particularly, reduces payday borrowing, increases full-time college attendance, and promotes selecting less risky institutions. Reductions in high-cost borrowing specifically occurred among subpopulations that are more likely to use AFS. However, in context of higher education, stronger improvements in college financing were seen among non-disadvantaged students. My findings reveal that financial education evaluations should account for all financial behaviors that are relevant to young adults. Otherwise, we may underestimate the impacts of school-based financial education; thereby, discourage policymakers from adopting these policies. Overall, policymakers should consider establishing these mandates to ensure that youth enter adulthood with a basic set of information to make sound financial decisions. They may wish to emphasize their efforts in underserved districts.
Table of Contents
State-Mandated Financial Education and Younger Consumers' Use of Alternative Financial Services
State-Mandated Financial Education and College Students' Postsecondary Decisions
Considering Recall Bias in Analyzing Impacts of Financial Education Mandates