The Causal Mechanism of Financial Education: Evidence from Mediation Analysis

Fenella Carpena and Bilal Zia

Working Papers from Oslo Metropolitan University, Oslo Business School

Abstract: This paper uses a field experiment in India with multiple financial education treatments to investigate the causal mechanisms between financial education and financial behavior. Focusing on the mediating role of financial literacy, we propose a broader definition of financial knowledge that includes three dimensions: numeracy skills, financial awareness, and attitudes towards personal finance. We then employ causal mediation analysis to investigate the proportion of the treatment effect that can be attributed to these three channels. Strikingly, we find that numeracy does not mediate any effects of financial education on household outcomes. For simple financial actions such as budgeting, both awareness and attitudes serve as critical pathways, while for more complex financial activities such as opening a savings account, attitudes play a more prominent role. These findings underscore the importance of changing perceptions about financial products and services as a vital mechanism for the success of financial education.

Keywords: Financial Education; Financial Literacy; Financial Knowledge; Causal Mediation Analysis; Mechanism of Impact; Impact Evaluation (search for similar items in EconPapers)
JEL-codes: C93 D14 G21 O12 (search for similar items in EconPapers)
Date: 2018-09-05
New Economics Papers: this item is included in nep-fle
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://doi.org/10.2139/ssrn.3244634 (text/html)

Related works:
Journal Article: The causal mechanism of financial education: Evidence from mediation analysis (2020)
Working Paper: The Causal Mechanism of Financial Education: Evidence from Mediation Analysis (2018)
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:oml:wpaper:201803

DOI: 10.2139/ssrn.3244634

Access Statistics for this paper

More papers in Working Papers from Oslo Metropolitan University, Oslo Business School Contact information at EDIRC.
Bibliographic data for series maintained by Eirik Hanssen ().