State Mandated Financial Education and the Credit Behavior of Young Adults

Alexandra Brown, J. Michael Collins, Maximilian Schmeiser and Carly Urban

No 2014-68, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: In the U.S., a number of states have mandated personal finance classes in public school curricula to address perceived deficiencies in financial decision-making competency. Despite the growth of financial and economic education provided in public schools, little is known about the effect of these programs on the credit behaviors of young adults. Using a panel of credit report data, we examine young adults in three states where personal financial education mandates were implemented in 2007: Georgia, Idaho, and Texas. We compare the credit scores and delinquency rates of young adults in each of these states pre- and post-implementation of the education to those of students in a synthetic control state and then bordering states without financial education. We find that young people who are in school after the implementation of a financial education requirement have higher relative credit scores and lower relative delinquency rates than those in control states.

Keywords: Financial literacy; financial education; credit scores; delinquency (search for similar items in EconPapers)
Pages: 42 pages
Date: 2014-09-03
New Economics Papers: this item is included in nep-ban, nep-edu, nep-ger and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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