Skip to main content Accessibility help

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



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.



Hide All
Agarwal, S., Amromin, G., Ben-David, I., Chomsisengphet, S., and Evanoff, D. (2010) Learning to cope: voluntary financial education programs and the housing crisis. American Economic Review, Papers and Proceedings, 100(2): 495500.
Agarwal, S., Amromin, G., Ben-David, I., Chomsisengphet, S., and Evanoff, D. (2011) Financial counseling, financial literacy, and household decision-making. In Mitchell, O. S. and Lusardi, A. (eds), Financial Literacy: Implications for Retirement Security and the Financial Marketplace. Oxford: Oxford University Press, pp. 181205.
Ashenfelter, O. (1978) Estimating the effect of training programs on earnings. Review of Economics and Statistics, 60(1): 4750.
Bernheim, B. D. and Garrett, D. M. (2003) The effects of financial education in the workplace: evidence from a survey of households. Journal of Public Economics, 87(7–8): 14871519.
Bernheim, B. D., Garrett, D. M., and Maki, D. M. (2001) Education and saving: the long-term effects of high school financial curriculum mandates. Journal of Public Economics, 80(3): 435465.
Borden, L. M., Lee, S.-A., Serido, J., and Collins, D. (2008) Changing college students’ financial knowledge, attitudes, and behavior through seminar participation. Journal of Family and Economic Issues, 29(1): 2340.
Brown, M., van der Klaauw, W., Wen, J., and Zafar, B. (2013) Financial education and the debt behavior of the young. Federal Reserve Bank of New York Staff Report No. 634, September.
Carlin, B. I. and Robinson, D. T. (2012) What does financial literacy training teach us? Journal of Economic Education, 43(3): 235247.
Chen, H. and Volpe, R. P. (1998) An analysis of personal financial literacy among college students. Financial Services Review, 7(2): 107128.
Clark, R., d'Ambrosio, M., McDermed, A., and Sawant, K. (2006) Retirement plans and saving decisions: The role of information and education. Journal of Pension Economics and Finance, 5(1): 4567.
Clark, R., Morrill, M., and Allen, S. (2012) Effectiveness of employer-provided financial information: Hiring to retiring. American Economic Review, 102(3): 314318.
Cole, S., Paulson, A., and Shastry, G. K. (2015) High school curriculum and financial outcomes: The impact of mandated personal finance and mathematics courses. Harvard Business School Working Paper, December.
Fernandes, D., Lynch, J. G. Jr., and Netemeyer, R. G. (2014) Financial literacy, financial education, and downstream financial behaviors. Management Science, 60(8): 18611883.
Friedline, T., Elliott, W., and Chowa, G. A. N. (2013) Testing an asset-building approach for young people: Early access to savings predicts later savings. Economics of Education Review, 33(April): 3151.
Gartner, K. and Todd, R. M. (2005) Effectiveness of online early intervention financial education programs for credit-card holders. Federal reserve bank of Chicago. Working Paper, Federal Reserve Bank Chicago.
Gerardi, K., Goette, L., and Meier, S. (2010) Financial literacy and subprime mortgage delinquency: Evidence from a survey matched to administrative data. Federal Reserve of Atlanta Working Paper 2010–10. April.
Gutter, M. and Copur, Z. (2011) Financial behaviors and financial wellbeing of college students: Evidence from a national survey. Journal of Family and Economic Issues, 32(4): 699714.
Lusardi, A. and Mitchell, O. S. (2007a) Baby boomer retirement security: The roles of planning, financial literacy, and housing wealth. Journal of Monetary Economics, 54(1): 205224.
Lusardi, A. and Mitchell, O. S. (2007b) Financial literacy and retirement preparedness: Evidence and implications for financial education. Business Economics, 42(1): 3544.
Lusardi, A. and Mitchell, O. S. (2009) How ordinary consumers make complex economic decisions: Financial literacy and retirement readiness. NBER Working Paper No. 15350.
Lusardi, A. and Mitchell, O. S. (2014) The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1): 544.
Lusardi, A., Mitchell, O. S., and Curto, V. (2010) Financial literacy among the young. Journal of Consumer Affairs, 44(2): 358380.
Lusardi, A., Michaud, P.-C., and Mitchell, O. S. (2017) Optimal financial literacy and wealth inequality. Journal of Political Economy, 125(2): 431477.
Mandell, L. and Klein, L. S. (2007) Motivation and financial literacy. Financial Services Review, 16(2): 106116.
Mandell, L. and Klein, L. S. (2009) The impact of financial literacy education on subsequent financial behavior. Journal of Financial Counseling and Planning, 20(1): 1324.
McArdle, J., Smith, J., and Willis, R. (2011) Cognition and economic outcomes in the health and retirement survey. In Wise, D. (ed.) Explorations in the Economics of Aging. Chicago: University of Chicago Press, pp. 209236.
Meier, S. and Sprenger, C. (2010) Present-biased preferences and credit card borrowing. American Economic Journal: Applied Economics 2(1): 193210.
Monetary Authority of Singapore (MAS). (2005) National Financial Literacy 2005, Findings and Recommendations.
OECD. (nd.) Financial Education. Directorate for Financial and Enterprise Affairs.,3355,en_2649_15251491_1_1_1_1_1,00.html.
Peng, T., Martina, C., Bartholomae, S., Fox, J. J., and Cravener, G. (2007) The impact of personal finance education delivered in high school and college courses. Journal of Family and Economic Issues, 28(2): 265284.
President's Advisory Committee on Financial Literacy (PACFL). (2008). Annual Report to the President: Executive Summary.
Skimmyhorn, W. L. (2016) Assessing financial education: Evidence from a personal financial management course. American Economic Journal: Economic Policy, 8(2): 322343.
Tennyson, S. and Nguyen, C. (2001) State curriculum mandates and student knowledge of personal finance. Journal of Consumer Affairs, 35(2): 241262.
Volpe, R. P., Chen, H., and Pavlicko, J. J. (1996) Personal investment literacy among college students: a survey. Financial Practice and Education, 6(2): 8694.
Webley, P. and Nyhus, E. K. (2013) Economic socialization, saving, and assets in European young adults. Economics of Education Review, 33(April): 1930.
Xiao, J. J., Ahn, S. Y., Serido, J., and Shim, S. (2014) Earlier financial literacy and later financial behaviour of college students. International Journal of Consumer Studies, 38(6): 593601.


Related content

Powered by UNSILO

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



Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed.