Financial Literacy Education in a Work Release Program for an Incarcerated Sample

Abstract

We obtained 180 pre- and post-test surveys to investigate how an established financial literacy program may have increased financial knowledge of residents in a work release program in Augusta, Georgia. Paired t tests analyzed changes in subjective and objective financial knowledge, understanding of banking and credit, and financial attitudes. OLS regressions of pre- and post-test financial knowledge were guided by human capital theory to learn which program participant characteristics were associated with greater increase in knowledge and infer why. Education, age, and use of financial tools were significant predictors in the pretest. Controlling for pretest knowledge, there were significant, positive differences from pre- to post-test, regardless of race. Implications for further research and specific suggestions for financial education content for the incarcerated are provided.

Barriers to Banking: A Mixed‐Methods Investigation of Previously Incarcerated Individuals' Banking Perceptions and Financial Knowledge

“…One of the major themes that emerged across cases in the qualitative phase was barriers to banking. Like Mielitz, MacDonald, and Lurtz's () findings, barriers to banking in the current study included difficulties understanding products and services available as well as challenges faced when presenting the state‐issued Department of Corrections (DOC) identification when attempting to open an account. Regardless of level of financial knowledge, respondents were met with difficulties utilizing preferred facilities, or in some cases any banking services, due to an unaccepted DOC ID.…”

“…Building upon Huston's () framework for financial literacy, our findings support the idea that financial literacy is a symbiotic and ongoing relationship between knowledge and behavior, which makes literacy continuous. For individuals who have experienced incarceration, having an influential person, with whom one interacts for financial purposes impacts financial knowledge and behavior (Mielitz, MacDonald, and Lurtz ). This body of research is in its infancy.…”

“…No known literature currently exists that identifies the financial knowledge of recently released individuals, the population of interest for the current study. However, a few studies are available regarding financial knowledge and the incarcerated (Call et al ; Galchus , ; Koenig ; Mielitz and MacDonald ; Mielitz, MacDonald, and Lurtz ), indicating financial knowledge levels of inmates are low. Galchus (, ), along with Mielitz and MacDonald (), measured the financial knowledge levels of incarcerated men and women in two southern states.…”

“…Financial knowledge was a composite variable made up of 12 financial knowledge questions taken from the Jump$tart Coalition Financial Literacy Survey (http://jumpstart.org, ; Mielitz and MacDonald ). The Jump$tart questions used in the current project (available upon request) were selected based on research (Koenig ; Mielitz, MacDonald, and Lurtz ) and applicability and relevancy to individuals' restarting their financial life after incarceration. The questions covered topics such as budgeting, insurance, withholding, saving, interest, growth of savings, borrowing, and inflation.…”

“…Financial literacy is one area of research that has shown most Americans have low financial knowledge and capability, with research reporting that most of the population does not possess a passing grade for financial knowledge (Fernandes, Lynch Jr., and Netemeyer ; Lusardi and Mitchell ; Lusardi, Mitchell, and Curto ). Other works have specifically addressed low financial knowledge of inmates (Koenig ; Mielitz and MacDonald ; Mielitz, MacDonald, and Lurtz ). Minimal research currently exists on the financial aspects, including financial knowledge and capability, that impact previously incarcerated individuals.…”