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Does financial education enhance financial preparedness? Evidence from a natural experiment in Singapore

Published online by Cambridge University Press:  15 August 2017

RASHMI BARUA ,
BENEDICT KOH  and
OLIVIA S. MITCHELL
RASHMI BARUA
Affiliation:
School of International Studies, Jawaharlal Nehru University, New Delhi 110067, India (e-mail: barua.bhowmik@gmail.com)
BENEDICT KOH
Affiliation:
Singapore Management University, 50, Stamford Road #04-01 S(178899), Singapore, Singapore (e-mail: skkoh@smu.edu.sg)
OLIVIA S. MITCHELL
Affiliation:
Wharton School, University of Pennsylvania, 3620 Locust Walk, 3000 SH-DH, Philadelphia, PA 19104, USA (e-mail: mitchelo@wharton.upenn.edu)
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Abstract

We evaluate how financial education provided to college students influenced their financial knowledge and planning in a quasi-experimental setting where we control for student motivation to enroll in the course. Using a difference-in-difference strategy, we show that financial education led to an increase in financial knowledge and planning. Specifically, we find that financial education improved students’ financial knowledge score by 11%, and financial planning score by 16%. No statistically significant effects are detected for student levels of financial prudence, discipline, or outcomes related to credit card usage.

Keywords

D14D12I20Financial literacynatural experiment
Type
Article
Information
Journal of Pension Economics & Finance , Volume 17 , Special Issue 3: Advances in Understanding Pension Decisions , July 2018 , pp. 254 - 277
Copyright
Copyright © Cambridge University Press 2017 

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