Causal Effects of Financial Education Intervention Aimed at University Students on Financial Knowledge and Financial Self-Efficacy

Manuel Salas-Velasco
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Manuel Salas-Velasco: Department of Applied Economics, Campus Cartuja, University of Granada, 18071 Granada, Spain

JRFM, 2022, vol. 15, issue 7, 1-16

Abstract: Based on a randomized controlled experiment among final-year undergraduate students, we provide an assessment of the treatment effects of financial education intervention focused on debt-financed graduate education decision-making. Specifically, this study finds positive treatment effects on both college seniors’ objective financial knowledge and subjective financial knowledge and self-confidence (i.e., perceived financial self-efficacy). Individual financial well-being is thought to be enhanced by improved financial knowledge test scores and perceived financial self-efficacy. In addition, we carry out a causal mediation analysis to investigate the extent to which objective financial knowledge plays a mediating role in the effect of financial education treatment on the intervention outcome (perceived financial self-efficacy). The mediation proportion, the proportion of treatment effect on outcome explained by the intermediate variable of financial knowledge, is around 21%, which is important. Thus, policies that aim to improve financial capabilities among college students through financial education programs should be aware that financial literacy is a significant antecedent of (a prerequisite for) financial self-efficacy.

Keywords: financial education; financial literacy; financial self-efficacy; causal mediation analysis; randomized controlled experiment (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2022
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