On the methodology of measuring the effectiveness of financial education programs
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On the Methodology of Measuring the Effectiveness of Financial Education Programs. Jeanne Hogarth Dan Gorin Casey Bell Consumer & Community Affairs Federal Reserve Board

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On the Methodology of Measuring the Effectiveness of Financial Education Programs

Jeanne Hogarth

Dan Gorin

Casey Bell

Consumer & Community Affairs

Federal Reserve Board

The analysis and conclusions set forth in this presentation represent the work of the author and do not indicate concurrence of the Federal Reserve Board, the Federal Reserve Banks, or their staff. Mention or display of a trademark, proprietary product, or firm in the presentation by the author does not constitute an endorsement or criticism by the Federal Reserve.


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Critiques of Studies Financial Education Programs

  • No control group

  • No longitudinal studies

  • Sensitive to stages of behavior change

  • Multiple measures of outcomes

    • Behaviors, attitudes, satisfaction


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Federal Reserve System efforts Financial Education Programs

  • Three major efforts at evaluation of financial education are in at various stages

    • Federal Reserve Board - Financial management course at Ft. Bliss

    • Philadelphia Reserve Bank (RB) – Homeownership Counseling study

    • Kansas City RB – Workplace Fin. Ed.


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Federal Reserve System efforts Financial Education Programs

  • Philadelphia Reserve Bank longitudinal study of the effectiveness of homeownership counseling

    • $2 million study

    • 1,000 participants randomly assigned to two different levels of training

    • To be tracked for 5 years including tax returns and credit bureau records

    • Have enrolled over 600 families


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Federal Reserve System efforts Financial Education Programs

  • Kansas City Reserve Bank evaluation of Workplace Counseling

    • Working with Wadell & Reed Financial Advisors

    • Access to large amount of proprietary data on employee responses to financial education efforts in the workplace


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Financial Management Behaviors of Military Personnel Project Financial Education Programs

  • Addresses issues of control group and longitudinal nature of studies

  • Tracks changes in stages and behaviors

  • Includes multiple measures

    • Behaviors, attitudes, satisfaction


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Project Timeline Financial Education Programs

  • 2002 – MOU with Defense

  • 2003 – identified AER as collaborator

  • 2004 – obtained funding and contractor

  • 2005 – developed survey and web site

  • 2006 – started paper surveys

    implemented 2nd round online surveys


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Project Timeline Financial Education Programs

  • 2007 – started paper surveys for 2nd round

  • 2008 – on-post “umbrella week” paper survey

    • Some 2nd round surveys, some new baseline data


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Lessons Learned Financial Education Programs

  • Be patient, but not too patient

    • Have back-up plan(s)

  • Communicate your priorities

  • Find an advocate

  • Follow up


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Baseline Data Financial Education Programs

  • Ages 19-25

  • 3/4ths are E1 or E2 ($1,350 - $1,500/mo)

  • 2/3rds have HS or GED

  • Race/ethnicity same as general population

  • Financial ed course vs. “basic training”

  • All have bank accounts


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Baseline Data Financial Education Programs

  • Collected at time of course (financial education group) or “in-processing” at ACS orientation (control group)

  • Identify baseline differences between 2 groups

  • ~ 680 in control group, ~2625 in education group, ~95 time series obs.


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Questions Financial Education Programs

  • Demographics

  • Pre-military history/experiences

  • Financial products

  • Current financial standing

  • Financial behaviors

  • Financial activities

  • Self-assessment – stress, skills, situation

  • Additional financial education or training


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Good News Financial Education Programs


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“Good” Financial Behaviors Financial Education Programs


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Bad News Financial Education Programs


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“Bad” Financial Behaviors Financial Education Programs


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Formal Education & Behavior Financial Education Programs


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Income & Behaviors Financial Education Programs


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Early Exposure to Finances Financial Education Programs


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Marital Status and Behaviors Financial Education Programs


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Family Influences on Good Behaviors Financial Education Programs


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What’s Next? Financial Education Programs

  • Comparisons

    • Education vs control

    • Reserve & National Guard vs others

    • “in-processing” control group vs umbrella week control group

    • 1-day education group vs 2-day education group

  • Time series

    • Changes over time


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