Financial Literacy, Financial Education and Economic Outcomes

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

NBER Working Paper No. 18412
Issued in September 2012, Revised in October 2012
NBER Program(s):Aging, Economics of Education, Labor Studies, Public Economics

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 offer products that facilitate informed choice. We review the literature on alternative policies to improve financial outcomes, and compare the evidence to evidence on the efficacy and cost of financial education. Finally, we discuss directions for future research.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w18412

Published: Justine S. Hastings & Brigitte C. Madrian & William L. Skimmyhorn, 2013. "Financial Literacy, Financial Education, and Economic Outcomes," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 347-373, 05. citation courtesy of

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