EconPapers    
Economics at your fingertips  
 

Financial Literacy: If It’s So Important, Why Isn’t It Improving?

Lewis Mandell

No 2006-PB-08, NFI Policy Briefs from Indiana State University, Scott College of Business, Networks Financial Institute

Abstract: Financial literacy has assumed greater importance in our society as the result of the increasing complexity of financial products and the simultaneous cutting of economic safety nets by government, employers and even parents who worry about their own retirements. If the problem isn’t solved and consumers don’t look out for themselves, they may exercise a 'put option' by throwing themselves on the mercy of taxpayers when they cannot support themselves in retirement. In addition, a lack of financial literacy may contribute to seemingly 'irrational' behavior that distorts financial markets. Measured financial literacy scores among high school seniors is low and has even declined since 1997. More distressing is the fact that students who take a course in personal finance end up no more financially literate than those who don’t. Tracking students who took such a course over a 5 year period shows no positive impact on financial literacy, attitudes toward thrift or behavior. The only bright spot is the stock market game which consistently increases literacy scores, indicating that teaching should be interactive, contemporary and 'fun.'

Keywords: Financial literacy; financial well being; social put (search for similar items in EconPapers)
Pages: 11 pages
Date: 2006-04
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.indstate.edu/business/sites/business.in ... 06-PB-08_Mandell.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nfi:nfipbs:2006-pb-08

Access Statistics for this paper

More papers in NFI Policy Briefs from Indiana State University, Scott College of Business, Networks Financial Institute Contact information at EDIRC.
Bibliographic data for series maintained by Ray Thomas ().

 
Page updated 2022-09-28
Handle: RePEc:nfi:nfipbs:2006-pb-08