No abstract

Based on a sample of university students, we provide evidence that a small-scale training intervention has both a statistically and economically significant effect on subjective and objective assessments of financial knowledge. We also show that the intervention increases self-assessed more than actual financial knowledge. The intervention consists of measuring financial literacy before and after a small on-line course and is administered through an on-line platform.

Job security is important for durable consumption and household savings. Using surveys, workers express a probability that they will lose their job in the next 12 months. In order to assess the empirical content of these probabilities, we link survey data to administrative data with labor market outcomes. Workers predict job loss quite well, in particular those whose job loss is followed by unemployment. Workers with higher job loss expectations acquire cheaper cars, and are less likely to buy new cars. In line with models of precautionary saving, higher job loss expectations are associated with more savings and less exposure to risky assets.

A large and growing literature documents that a large fraction of the population lacks of the basic skills to make sound financial decisions. This evidence has prompted a number of financial education initiatives around the world. These initiatives often take the form of education programs, but are rarely designed to be evaluated. A first urgent question is whether financial education is actually effective in enhancing the level of financial literacy.Using an evaluation design, our experiment studies the effect of financial education on financial literacy, investment attitudes and on how individuals perceive their level of financial literacy. To remove the effect of potentially important confounders, we run the same experiment in the field and in the laboratory.Our evidence shows a non-negligible effect on financial literacy and investment attitude, but an even larger effect on the degree of self-assessed financial literacy in the population of university students. The exercise thus uncovers an interesting pattern: financial education seems to improve more what individuals think to know than what individuals actually know.The results suggest that, while being able to increase financial literacy, financial education programs can also cause individuals to become more confident in their abilities without actually being more equipped to face financial decisions. Our results imply an important warning on the effectiveness of financial education initiatives. The increase in self-confidence seems to be a necessary by-product of financial education. An extremely polluting by-product, if the increase in self-confidence is not matched by the improvement in actual skills. Financial education, literacy and investment attitudesAbstract Based on a sample of university students, we provide field and laboratory evidence that a small scale training intervention has a both statistically and economically significant effect on subjective and objective assessments of financial knowledge. We also show that for a large part of students whose self-assessed financial knowledge has improved we do not find an increase in their actual skills.