Why Is Voluntary Financial Education So Unpopular? Experimental Evidence from Mexico
Take-up of voluntary financial education programs is typically extremely low. This paper reports on randomized experiments around a large financial literacy course offered in Mexico City to understand the reasons for low take-up, and to measure the...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2013/05/17692433/voluntary-financial-education-so-unpopular-experimental-evidence-mexico http://hdl.handle.net/10986/15580 |
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okr-10986-15580 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCESS TO SAVINGS ADMINISTRATIVE DATA ADULT FINANCIAL EDUCATION ANNUAL INCOME APR ATTENDANCE RATE ATTENDANCE RATES AUDITS BANK ACCOUNT BANK CREDIT BANK DEPOSITS BANKING PRODUCTS BANKING SERVICES BARRIERS TO PARTICIPATION BEHAVIORAL ECONOMICS BORROWING BUSINESS SCHOOL BUSINESS TRAINING CALCULATIONS CHECKS COLLEGE STUDENT COLLEGE STUDENTS COMMERCIAL BANK COMMERCIAL BANKS CONSUMER CONSUMER CREDIT CONSUMER EDUCATION CONSUMER PROTECTION CONSUMERS CONTRIBUTION COST OF CREDIT CREDIT CARD CREDIT CARD BALANCE CREDIT CARD BALANCES CREDIT CARD DEBT CREDIT CARD INTEREST RATE CREDIT CARD PAYMENT CREDIT CARD USE CREDIT CARDS CREDIT COUNSELING CREDIT HISTORY CREDIT LIMIT CREDIT MANAGEMENT CREDIT REPORT CREDIT SCORE CROP INSURANCE CURRENCY DEBT MANAGEMENT DELINQUENCY DEPOSIT DEPOSIT INSURANCE DEPOSITS DEVELOPMENT BANK DISCOUNT RATES EARLY INTERVENTION ECONOMIC DECISIONS ECONOMIC DEVELOPMENT EDUCATED INDIVIDUALS EDUCATION LEVEL EMPLOYEE EMPLOYER EMPLOYERS EXPENDITURES EXTORTIONS FAMILIES FARMERS FINANCIAL BEHAVIOR FINANCIAL BEHAVIORS FINANCIAL CRISIS FINANCIAL CURRICULUM FINANCIAL EDUCATION FINANCIAL EDUCATION COURSE FINANCIAL EDUCATION COURSES FINANCIAL EDUCATION MANDATES FINANCIAL EDUCATION PROGRAMS FINANCIAL EXPERIENCE FINANCIAL INCENTIVE FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL KNOWLEDGE FINANCIAL LITERACY FINANCIAL LITERACY EFFORTS FINANCIAL LITERACY PROGRAM FINANCIAL LITERACY PROGRAMS FINANCIAL LITERACY TRAINING FINANCIAL LITERACY TRAININGS FINANCIAL MARKET FINANCIAL MATTERS FINANCIAL NEEDS FINANCIAL OUTCOMES FINANCIAL PRODUCT FINANCIAL PRODUCTS FINANCIAL PROVIDERS FINANCIAL SERVICES FINANCIAL SYSTEM FIRST CREDIT FUTURE VALUE GENDER GENERAL POPULATION GENERAL PUBLIC GOOD CREDIT GROUPS OF PEOPLE HIGH SCHOOL HIGH SCHOOL FINANCIAL EDUCATION HIGH SCHOOLS HOMEOWNERS HOUSEHOLD EXPENDITURE HOUSEHOLD FINANCE HOUSEHOLD INCOME HOUSEHOLD SAVING HOUSEHOLD SAVINGS HOUSEHOLDS ID ILLITERATE HOUSEHOLDS INCOME GROUP INDEBTEDNESS INDIVIDUAL RETIREMENT INDIVIDUAL RETIREMENT ACCOUNTS INFLATION INSURANCE INTEREST RATES INTERNATIONAL BANK INVESTMENT PORTFOLIO KNOWLEDGE LEVEL LACK OF ACCESS LACK OF INFORMATION LACK OF INTEREST LACK OF KNOWLEDGE LATE PAYMENT LEVELS OF RISK LITERACY COURSE LITERACY COURSES LITERACY SKILLS LITERATE INDIVIDUALS LOAN LOAN BEHAVIOR LOAN BEHAVIORS LOST INCOME LOW FINANCIAL LITERACY LOW-INCOME LOW-INCOME INDIVIDUALS MARKETING MASS MEDIA MIGRANT WORKERS MINIMUM BALANCES MINIMUM PAYMENT MONETARY INCENTIVE MONETARY INCENTIVES MONTHLY INCOME MORTGAGE MORTGAGES NUMERACY OLDER INDIVIDUALS OUTSTANDING DEBT OVERDRAFT PAWN PAWN SHOP PAYMENT BEHAVIOR PENSION PENSION FUND PENSION FUND ADMINISTRATOR PENSION FUNDS PENSION SAVINGS PENSION SYSTEM PERSONAL FINANCES PERSONAL SAVINGS PRIMARY EDUCATION PRIVATE PENSIONS PROBABILITY PROVISION OF INFORMATION PUBLIC ECONOMICS QUESTIONNAIRE QUESTIONNAIRES RADIO RECEIPT REMITTANCE REMITTANCES REPAYMENT REPAYMENT RATES RESPONSIBILITIES RETIREMENT RETIREMENT AGE RETIREMENT PLAN RETIREMENT PLANNING RETIREMENT READINESS RETIREMENT SAVING RETIREMENT SAVINGS RETIREMENT SEMINARS RISK AVERSION SAVING BEHAVIOR SAVING MONEY SAVINGS SAVINGS ACCOUNT SAVINGS ACCOUNTS SAVINGS BEHAVIOR SAVINGS BEHAVIORS SAVINGS GOAL SAVINGS GOALS SAVINGS INSTRUMENTS SAVINGS RATE SAVINGS RATES SCHOOL EDUCATION SMART MONEY SOCIAL NETWORKS SOUND FINANCIAL DECISIONS SOURCES OF CREDIT TAKE-UP RATE TAKE-UP RATES TRAINING COURSE TRAINING COURSES TRAINING PROGRAM TRAINING PROGRAMS TRANSACTION TRANSACTION COSTS URBAN AREAS WAGE WORKBOOKS WORKING ADULTS WORKING CAPITAL WORTH |
| spellingShingle |
ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCESS TO SAVINGS ADMINISTRATIVE DATA ADULT FINANCIAL EDUCATION ANNUAL INCOME APR ATTENDANCE RATE ATTENDANCE RATES AUDITS BANK ACCOUNT BANK CREDIT BANK DEPOSITS BANKING PRODUCTS BANKING SERVICES BARRIERS TO PARTICIPATION BEHAVIORAL ECONOMICS BORROWING BUSINESS SCHOOL BUSINESS TRAINING CALCULATIONS CHECKS COLLEGE STUDENT COLLEGE STUDENTS COMMERCIAL BANK COMMERCIAL BANKS CONSUMER CONSUMER CREDIT CONSUMER EDUCATION CONSUMER PROTECTION CONSUMERS CONTRIBUTION COST OF CREDIT CREDIT CARD CREDIT CARD BALANCE CREDIT CARD BALANCES CREDIT CARD DEBT CREDIT CARD INTEREST RATE CREDIT CARD PAYMENT CREDIT CARD USE CREDIT CARDS CREDIT COUNSELING CREDIT HISTORY CREDIT LIMIT CREDIT MANAGEMENT CREDIT REPORT CREDIT SCORE CROP INSURANCE CURRENCY DEBT MANAGEMENT DELINQUENCY DEPOSIT DEPOSIT INSURANCE DEPOSITS DEVELOPMENT BANK DISCOUNT RATES EARLY INTERVENTION ECONOMIC DECISIONS ECONOMIC DEVELOPMENT EDUCATED INDIVIDUALS EDUCATION LEVEL EMPLOYEE EMPLOYER EMPLOYERS EXPENDITURES EXTORTIONS FAMILIES FARMERS FINANCIAL BEHAVIOR FINANCIAL BEHAVIORS FINANCIAL CRISIS FINANCIAL CURRICULUM FINANCIAL EDUCATION FINANCIAL EDUCATION COURSE FINANCIAL EDUCATION COURSES FINANCIAL EDUCATION MANDATES FINANCIAL EDUCATION PROGRAMS FINANCIAL EXPERIENCE FINANCIAL INCENTIVE FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL KNOWLEDGE FINANCIAL LITERACY FINANCIAL LITERACY EFFORTS FINANCIAL LITERACY PROGRAM FINANCIAL LITERACY PROGRAMS FINANCIAL LITERACY TRAINING FINANCIAL LITERACY TRAININGS FINANCIAL MARKET FINANCIAL MATTERS FINANCIAL NEEDS FINANCIAL OUTCOMES FINANCIAL PRODUCT FINANCIAL PRODUCTS FINANCIAL PROVIDERS FINANCIAL SERVICES FINANCIAL SYSTEM FIRST CREDIT FUTURE VALUE GENDER GENERAL POPULATION GENERAL PUBLIC GOOD CREDIT GROUPS OF PEOPLE HIGH SCHOOL HIGH SCHOOL FINANCIAL EDUCATION HIGH SCHOOLS HOMEOWNERS HOUSEHOLD EXPENDITURE HOUSEHOLD FINANCE HOUSEHOLD INCOME HOUSEHOLD SAVING HOUSEHOLD SAVINGS HOUSEHOLDS ID ILLITERATE HOUSEHOLDS INCOME GROUP INDEBTEDNESS INDIVIDUAL RETIREMENT INDIVIDUAL RETIREMENT ACCOUNTS INFLATION INSURANCE INTEREST RATES INTERNATIONAL BANK INVESTMENT PORTFOLIO KNOWLEDGE LEVEL LACK OF ACCESS LACK OF INFORMATION LACK OF INTEREST LACK OF KNOWLEDGE LATE PAYMENT LEVELS OF RISK LITERACY COURSE LITERACY COURSES LITERACY SKILLS LITERATE INDIVIDUALS LOAN LOAN BEHAVIOR LOAN BEHAVIORS LOST INCOME LOW FINANCIAL LITERACY LOW-INCOME LOW-INCOME INDIVIDUALS MARKETING MASS MEDIA MIGRANT WORKERS MINIMUM BALANCES MINIMUM PAYMENT MONETARY INCENTIVE MONETARY INCENTIVES MONTHLY INCOME MORTGAGE MORTGAGES NUMERACY OLDER INDIVIDUALS OUTSTANDING DEBT OVERDRAFT PAWN PAWN SHOP PAYMENT BEHAVIOR PENSION PENSION FUND PENSION FUND ADMINISTRATOR PENSION FUNDS PENSION SAVINGS PENSION SYSTEM PERSONAL FINANCES PERSONAL SAVINGS PRIMARY EDUCATION PRIVATE PENSIONS PROBABILITY PROVISION OF INFORMATION PUBLIC ECONOMICS QUESTIONNAIRE QUESTIONNAIRES RADIO RECEIPT REMITTANCE REMITTANCES REPAYMENT REPAYMENT RATES RESPONSIBILITIES RETIREMENT RETIREMENT AGE RETIREMENT PLAN RETIREMENT PLANNING RETIREMENT READINESS RETIREMENT SAVING RETIREMENT SAVINGS RETIREMENT SEMINARS RISK AVERSION SAVING BEHAVIOR SAVING MONEY SAVINGS SAVINGS ACCOUNT SAVINGS ACCOUNTS SAVINGS BEHAVIOR SAVINGS BEHAVIORS SAVINGS GOAL SAVINGS GOALS SAVINGS INSTRUMENTS SAVINGS RATE SAVINGS RATES SCHOOL EDUCATION SMART MONEY SOCIAL NETWORKS SOUND FINANCIAL DECISIONS SOURCES OF CREDIT TAKE-UP RATE TAKE-UP RATES TRAINING COURSE TRAINING COURSES TRAINING PROGRAM TRAINING PROGRAMS TRANSACTION TRANSACTION COSTS URBAN AREAS WAGE WORKBOOKS WORKING ADULTS WORKING CAPITAL WORTH Bruhn, Miriam Lara Ibarra, Gabriel McKenzie, David Why Is Voluntary Financial Education So Unpopular? Experimental Evidence from Mexico |
| geographic_facet |
Latin America & Caribbean Mexico |
| relation |
Policy Research Working Paper;NO. 6439 |
| description |
Take-up of voluntary financial education
programs is typically extremely low. This paper reports on
randomized experiments around a large financial literacy
course offered in Mexico City to understand the reasons for
low take-up, and to measure the impact of financial
education. It documents that the general public displays
little interest in such courses and that participation is
low even among individuals who express interest in financial
education. The paper experimentally investigates barriers to
take-up, and finds no impact of relaxing reputational or
logistical constraints and no evidence that time
inconsistency is the reason for limited participation. Even
relatively sizeable monetary incentives get less than 40
percent of interested individuals invited to training to
attend. Using a randomized encouragement design, the authors
measure the impact of the course on financial knowledge and
behavior. Attending training results in a 9 percentage point
increase in financial knowledge and a 9 percentage point
increase in saving outcomes, but no impact on borrowing
behavior. Administrative data indicate that the savings
impact is relatively short-lived. The results suggest people
are making optimal choices not to attend financial education
courses, and point to the limits of using general purpose
courses to improve financial behavior for the general population. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Bruhn, Miriam Lara Ibarra, Gabriel McKenzie, David |
| author_facet |
Bruhn, Miriam Lara Ibarra, Gabriel McKenzie, David |
| author_sort |
Bruhn, Miriam |
| title |
Why Is Voluntary Financial Education So Unpopular? Experimental Evidence from Mexico |
| title_short |
Why Is Voluntary Financial Education So Unpopular? Experimental Evidence from Mexico |
| title_full |
Why Is Voluntary Financial Education So Unpopular? Experimental Evidence from Mexico |
| title_fullStr |
Why Is Voluntary Financial Education So Unpopular? Experimental Evidence from Mexico |
| title_full_unstemmed |
Why Is Voluntary Financial Education So Unpopular? Experimental Evidence from Mexico |
| title_sort |
why is voluntary financial education so unpopular? experimental evidence from mexico |
| publisher |
World Bank, Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2013/05/17692433/voluntary-financial-education-so-unpopular-experimental-evidence-mexico http://hdl.handle.net/10986/15580 |
| _version_ |
1764429460343357440 |
| spelling |
okr-10986-155802021-04-23T14:03:19Z Why Is Voluntary Financial Education So Unpopular? Experimental Evidence from Mexico Bruhn, Miriam Lara Ibarra, Gabriel McKenzie, David ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCESS TO SAVINGS ADMINISTRATIVE DATA ADULT FINANCIAL EDUCATION ANNUAL INCOME APR ATTENDANCE RATE ATTENDANCE RATES AUDITS BANK ACCOUNT BANK CREDIT BANK DEPOSITS BANKING PRODUCTS BANKING SERVICES BARRIERS TO PARTICIPATION BEHAVIORAL ECONOMICS BORROWING BUSINESS SCHOOL BUSINESS TRAINING CALCULATIONS CHECKS COLLEGE STUDENT COLLEGE STUDENTS COMMERCIAL BANK COMMERCIAL BANKS CONSUMER CONSUMER CREDIT CONSUMER EDUCATION CONSUMER PROTECTION CONSUMERS CONTRIBUTION COST OF CREDIT CREDIT CARD CREDIT CARD BALANCE CREDIT CARD BALANCES CREDIT CARD DEBT CREDIT CARD INTEREST RATE CREDIT CARD PAYMENT CREDIT CARD USE CREDIT CARDS CREDIT COUNSELING CREDIT HISTORY CREDIT LIMIT CREDIT MANAGEMENT CREDIT REPORT CREDIT SCORE CROP INSURANCE CURRENCY DEBT MANAGEMENT DELINQUENCY DEPOSIT DEPOSIT INSURANCE DEPOSITS DEVELOPMENT BANK DISCOUNT RATES EARLY INTERVENTION ECONOMIC DECISIONS ECONOMIC DEVELOPMENT EDUCATED INDIVIDUALS EDUCATION LEVEL EMPLOYEE EMPLOYER EMPLOYERS EXPENDITURES EXTORTIONS FAMILIES FARMERS FINANCIAL BEHAVIOR FINANCIAL BEHAVIORS FINANCIAL CRISIS FINANCIAL CURRICULUM FINANCIAL EDUCATION FINANCIAL EDUCATION COURSE FINANCIAL EDUCATION COURSES FINANCIAL EDUCATION MANDATES FINANCIAL EDUCATION PROGRAMS FINANCIAL EXPERIENCE FINANCIAL INCENTIVE FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL KNOWLEDGE FINANCIAL LITERACY FINANCIAL LITERACY EFFORTS FINANCIAL LITERACY PROGRAM FINANCIAL LITERACY PROGRAMS FINANCIAL LITERACY TRAINING FINANCIAL LITERACY TRAININGS FINANCIAL MARKET FINANCIAL MATTERS FINANCIAL NEEDS FINANCIAL OUTCOMES FINANCIAL PRODUCT FINANCIAL PRODUCTS FINANCIAL PROVIDERS FINANCIAL SERVICES FINANCIAL SYSTEM FIRST CREDIT FUTURE VALUE GENDER GENERAL POPULATION GENERAL PUBLIC GOOD CREDIT GROUPS OF PEOPLE HIGH SCHOOL HIGH SCHOOL FINANCIAL EDUCATION HIGH SCHOOLS HOMEOWNERS HOUSEHOLD EXPENDITURE HOUSEHOLD FINANCE HOUSEHOLD INCOME HOUSEHOLD SAVING HOUSEHOLD SAVINGS HOUSEHOLDS ID ILLITERATE HOUSEHOLDS INCOME GROUP INDEBTEDNESS INDIVIDUAL RETIREMENT INDIVIDUAL RETIREMENT ACCOUNTS INFLATION INSURANCE INTEREST RATES INTERNATIONAL BANK INVESTMENT PORTFOLIO KNOWLEDGE LEVEL LACK OF ACCESS LACK OF INFORMATION LACK OF INTEREST LACK OF KNOWLEDGE LATE PAYMENT LEVELS OF RISK LITERACY COURSE LITERACY COURSES LITERACY SKILLS LITERATE INDIVIDUALS LOAN LOAN BEHAVIOR LOAN BEHAVIORS LOST INCOME LOW FINANCIAL LITERACY LOW-INCOME LOW-INCOME INDIVIDUALS MARKETING MASS MEDIA MIGRANT WORKERS MINIMUM BALANCES MINIMUM PAYMENT MONETARY INCENTIVE MONETARY INCENTIVES MONTHLY INCOME MORTGAGE MORTGAGES NUMERACY OLDER INDIVIDUALS OUTSTANDING DEBT OVERDRAFT PAWN PAWN SHOP PAYMENT BEHAVIOR PENSION PENSION FUND PENSION FUND ADMINISTRATOR PENSION FUNDS PENSION SAVINGS PENSION SYSTEM PERSONAL FINANCES PERSONAL SAVINGS PRIMARY EDUCATION PRIVATE PENSIONS PROBABILITY PROVISION OF INFORMATION PUBLIC ECONOMICS QUESTIONNAIRE QUESTIONNAIRES RADIO RECEIPT REMITTANCE REMITTANCES REPAYMENT REPAYMENT RATES RESPONSIBILITIES RETIREMENT RETIREMENT AGE RETIREMENT PLAN RETIREMENT PLANNING RETIREMENT READINESS RETIREMENT SAVING RETIREMENT SAVINGS RETIREMENT SEMINARS RISK AVERSION SAVING BEHAVIOR SAVING MONEY SAVINGS SAVINGS ACCOUNT SAVINGS ACCOUNTS SAVINGS BEHAVIOR SAVINGS BEHAVIORS SAVINGS GOAL SAVINGS GOALS SAVINGS INSTRUMENTS SAVINGS RATE SAVINGS RATES SCHOOL EDUCATION SMART MONEY SOCIAL NETWORKS SOUND FINANCIAL DECISIONS SOURCES OF CREDIT TAKE-UP RATE TAKE-UP RATES TRAINING COURSE TRAINING COURSES TRAINING PROGRAM TRAINING PROGRAMS TRANSACTION TRANSACTION COSTS URBAN AREAS WAGE WORKBOOKS WORKING ADULTS WORKING CAPITAL WORTH Take-up of voluntary financial education programs is typically extremely low. This paper reports on randomized experiments around a large financial literacy course offered in Mexico City to understand the reasons for low take-up, and to measure the impact of financial education. It documents that the general public displays little interest in such courses and that participation is low even among individuals who express interest in financial education. The paper experimentally investigates barriers to take-up, and finds no impact of relaxing reputational or logistical constraints and no evidence that time inconsistency is the reason for limited participation. Even relatively sizeable monetary incentives get less than 40 percent of interested individuals invited to training to attend. Using a randomized encouragement design, the authors measure the impact of the course on financial knowledge and behavior. Attending training results in a 9 percentage point increase in financial knowledge and a 9 percentage point increase in saving outcomes, but no impact on borrowing behavior. Administrative data indicate that the savings impact is relatively short-lived. The results suggest people are making optimal choices not to attend financial education courses, and point to the limits of using general purpose courses to improve financial behavior for the general population. 2013-09-04T16:55:19Z 2013-09-04T16:55:19Z 2013-05 http://documents.worldbank.org/curated/en/2013/05/17692433/voluntary-financial-education-so-unpopular-experimental-evidence-mexico http://hdl.handle.net/10986/15580 English en_US Policy Research Working Paper;NO. 6439 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Mexico |