Financial Education among Financially Vulnerable Populations in the United States

by Melody Harvey

Download eBook for Free

FormatFile SizeNotes
PDF file 1 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

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

  • Chapter One

    State-Mandated Financial Education and Younger Consumers' Use of Alternative Financial Services

  • Chapter Two

    State-Mandated Financial Education and College Students' Postsecondary Decisions

  • Chapter Three

    Considering Recall Bias in Analyzing Impacts of Financial Education Mandates

Research conducted by

This document was submitted as a dissertation in April 2018 in partial fulfillment of the requirements of the doctoral degree in public policy analysis at the Pardee RAND Graduate School. The faculty committee that supervised and approved the dissertation consisted of Grace Carman Grace (Chair), Trey Miller, and Jeremy Burke.

This report is part of the RAND Corporation dissertation series. Pardee RAND dissertations are produced by graduate fellows of the Pardee RAND Graduate School, the world's leading producer of Ph.D.'s in policy analysis. The dissertations are supervised, reviewed, and approved by a Pardee RAND faculty committee overseeing each dissertation.

Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.