Financial Literacy, Financial Education, and Economic Outcomes

Justine S. Hastings; Brigitte C. Madrian; William L. Skimmyhorn

doi:10.1146/annurev-economics-082312-125807

journal article Aug 02, 2013

Financial Literacy, Financial Education, and Economic Outcomes

Justine S. Hastings

Brigitte C. Madrian William L. Skimmyhorn

Annual Review of Economics Vol. 5 No. 1 pp. 347-373 · Annual Reviews

View at Publisher Save 10.1146/annurev-economics-082312-125807

Abstract

In this article, we review the literature on financial literacy, financial education, and consumer financial outcomes. We consider how financial literacy is measured in the current literature and examine how well the existing literature addresses whether financial education improves financial literacy or personal financial outcomes. We discuss the extent to which a competitive market provides incentives for firms to educate consumers or to offer products that facilitate informed choice. We review the literature on alternative policies to improve financial outcomes and compare the evidence with that on the efficacy and cost of financial education. Finally, we discuss directions for future research.

Topics

No keywords indexed for this article. Browse by subject →

References

104

[1]

10.1353/eca.0.0067

[2]

Agarwal S, Driscoll J, Gabaix X, Laibson D. 2011.Learning in the credit card market. Work. Pap., Fed. Reserve Bank Chicago 10.2139/ssrn.1091623

[3]

10.1257/aer.99.2.412

[4]

10.1207/s15427579jpfm0602_2

[5]

10.1017/s1474747211000461

[6]

Allgood S, Walstad WB. 2012.The effects of perceived and actual financial knowledge on credit card behavior. Work. Pap., Networks Financ. Inst., Indiana State Univ., Terre Haute 10.2139/ssrn.1896365

[7]

10.1162/00335530360698487

[8]

Amromin G, Huang J, Sialm C. 2007. The tradeoff between mortgage prepayments and tax-deferred retirement savings.J. Public Econ.91:2014–40 10.1016/j.jpubeco.2007.03.011

[9]

Anagol S, Cole S, Sarkar S. 2012.Understanding the incentives of commissions-motivated agents: theory and evidence from the Indian life insurance market. Finance Work. Pap. 12-055, Harvard Bus. Sch., Cambridge, MA 10.2139/ssrn.1978876

[10]

Ausubel LM. 1999.Adverse selection in the credit card market. Work. Pap., Univ. Maryland, College Park

[11]

10.1111/j.1475-5890.2007.00052.x

[12]

10.1016/s0047-2727(02)00217-7

[13]

Barr MS (2009)

[14]

Bell C Community Invest. (2008)

[15]

10.2139/ssrn.1445635

[16]

10.1016/j.jpubeco.2003.07.001

[17]

10.1016/s0047-2727(01)00184-0

[18]

10.1016/s0047-2727(00)00120-1

[19]

Beshears J (2008)

[20]

10.1353/jhr.2008.0017

[21]

Boyce L (2004)

[22]

Brobeck S (1990)

[23]

Brobeck S (1991)

[24]

Brobeck S (1993)

[25]

Brobeck S (1998)

[26]

10.1017/s1474747211000485

[27]

10.1257/aer.99.2.393

[28]

10.1111/j.1540-6261.2006.00883.x

[29]

10.1257/aer.101.5.2108

[30]

Campbell JY Work. Pap. (2010)

[31]

10.1257/jep.25.1.91

[32]

Carpena F, Cole S, Shapiro J, Zia B. 2011.Unpacking the casual chain of financial literacy. Work. Pap. 5798, World Bank, Washington, DC 10.1596/1813-9450-5798

[33]

10.1257/aer.103.1.47

[34]

10.1093/rfs/hhp097

[35]

10.1162/rest_a_00100

[36]

10.1016/j.euroecorev.2009.04.001

[37]

10.1111/j.1540-6261.2011.01696.x

[38]

Cole SA Is high school the right time to teach self-control? The effect of education on financial behavior (2012)

[39]

Collins JM. 2010.The impacts of mandatory financial education: evidence from a randomized field study. Work. Pap., Cent. Financ. Secur., Univ. Wisconsin–Madison 10.2139/ssrn.1652344

[40]

Collins JM (2009)

[41]

10.1111/j.1745-6606.2010.01179.x

[42]

Council for Economic Education (2011)

[43]

Coussens MD Consum. Interests Annu. (2006)

[44]

10.1257/aer.97.2.31

[45]

10.3982/ecta6551

[46]

Drexler A Keeping it simple: financial literacy and rules of thumb (2011)

[47]

Duarte F NBER Work. Pap. (2012)

[48]

Ellison G Q. J. Econ. (2005)

[49]

Figlio D Do children lose more than a home? The effects of foreclosure on children’s education outcomes (2011)

[50]

Francomano J (1988)

Showing 50 of 104 references

Cited By

695

TOWARDS SUSTAINABLE ENTREPRENEURIAL FUTURES: THE INTERSECTION OF DIGITAL FINANCE, FINANCIAL LITERACY, AND THE GIG ECONOMY

Raghuveer P, Hema Patil · 2026

International Journal of Research -...

Knowledge is power: Investor education and the mitigation of mutual fund style drift

Bin Huang, Zhiwei Wang · 2026

Journal of Banking & Finance

Does Financial Literacy Lead to Better Financial Decisions? Insights from India’s Female Workforce

· 2026

Metamorphosis: A Journal of Managem...

Technology-mediated financial education in developing countries: a systematic literature review

Abebe Walle Menberu · 2024

Cogent Business & Management

Unintended consequences: How does digital inclusive finance affect migrants' urban settlement intentions?

Xiaoxin Guo, Shihu Zhong · 2023

International Review of Financial A...

The effects of high school personal financial education policies on financial behavior

Carly Urban, Maximilian Schmeiser · 2020

Economics of Education Review

Ability or opportunity to act: What shapes financial well-being?

Jonathan Fu · 2020

World Development

The Household Finance Landscape in Emerging Economies

C. Badarinza, V. Balasubramaniam · 2019

Annual Review of Financial Economic...

Subjective financial knowledge, prudent behaviour and income

Leonore Riitsalu, Rein Murakas · 2019

International Journal of Bank Marke...

Financial Literacy and Stock Price Informativeness: a Cross-Country Study

Anita Todea · 2018

Studia Universitatis Babes-Bolyai O...

Harnessing Emotional Connections to Improve Financial Decisions: Evaluating the Impact of Financial Education in Mainstream Media

Gunhild Berg, Bilal Zia · 2017

Journal of the European Economic As...

Financial literacy, financial advice, and financial behavior

Oscar A. Stolper, Andreas Walter · 2017

Journal of Business Economics

Financial Literacy, Financial Education, and Downstream Financial Behaviors

Daniel Fernandes, John G. Lynch · 2014

Management Science

Metrics

695

Citations

104

References

Details

Published: Aug 02, 2013
Vol/Issue: 5(1)
Pages: 347-373

Authors

J

Justine S. Hastings

Department of Economics, Brown University, Providence, Rhode Island 02912;; National Bureau of Economic Research, Cambridge, Massachusetts 02138

B

Brigitte C. Madrian

National Bureau of Economic Research, Cambridge, Massachusetts 02138; Harvard Kennedy School of Government, Cambridge, Massachusetts 02138

W

William L. Skimmyhorn

Department of Social Sciences, United States Military Academy, West Point, New York 10996

Cite This Article

Justine S. Hastings, Brigitte C. Madrian, William L. Skimmyhorn (2013). Financial Literacy, Financial Education, and Economic Outcomes. Annual Review of Economics, 5(1), 347-373. https://doi.org/10.1146/annurev-economics-082312-125807

Financial Literacy, Financial Education, and Economic Outcomes

You May Also Like