The effect of financial education training on the financial literacy of Spanish students in PISA

ABSTRACT

The aim of this paper is to analyze the effect of financial education training on Spanish secondary students. To do this, we rely on data from PISA 2012. This included an assessment of students’ financial literacy for the first time. In order to identify the causal effect of financial education courses, we employ a difference-in-differences (DiD) approach to compare the outcomes of students receiving and not receiving education on financial concepts for two different subjects (financial literacy and reading comprehension). Our results suggest that financial education programs only have an impact if they are taught as part of other subjects, i.e. by means of a cross-curricular approach.

KEYWORDS:

• Education
• financial literacy
• PISA
• difference-in-differences

JEL CLASSIFICATION:

• I21
• H52
• C13

Acknowledgments

The authors would like to express their gratitude to the Savings Banks Foundation (Fundación de las Cajas de Ahorros –FUNCAS-) and the Spanish Ministry for Economy and Competitiveness for supporting this research through grant ECO2017-83759-P.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ In recent years, a number of OECD researchers have developed several papers giving an overview of the level of development of FE strategies in the international arena (Grifoni and Messy 2012; Atkinson and Messy, 2013; Messy and Monticone 2012, 2016).

² This information was taken from a questionnaire completed by the principals of the participant teaching institutions who were asked whether FE was available at their schools.

³ To guarantee the homogeneity between the treatment group (students that attended the course) and the control group (students that did not attend the course), the authors applied matching techniques to pair students with similar observable characteristics belonging to each sample.

⁴ For a more detailed analysis of this issue, see Hill, Griffiths, and Lim (2008).

⁵ The information available in this respect refers exclusively to the whether the training is given by teachers from the school or from external institutions. Unfortunately, no information is available on teaching staff’s expertise with respect to financial issues.

⁶ The possible responses are: (a) FE is not available; (b) FE has been available for less than two years; (c) FE has been available for two years or more.

⁷ We collapsed information about responses b and c into a single option (FE availability), thus we can construct a binary variable whose value is one if FE is available and 0 if it is not.

⁸ The original information provided by school principals refers to the number of hours per year, divided into five categories (not at all, 1–4, 5–19, 20–49 and more than 50). To build the dichotomous variables, we followed the criterion of assigning a value of zero if the principals marked options a or b (we regard a training of less than five hours per year to be practically non-existent) and a value of one if they marked options c, d or e.

⁹ Both indicators were built by PISA specialists taking the responses provided by the principals to a number of questions asking about the frequency with which they perform a series of activities as a baseline (see OECD 2014b, pp. 343–346 for a more detailed description).

¹⁰ These indicators were also built by PISA specialists taking the responses of principals to several questions structured similarly to the above as a baseline (see OECD 2014b, p. 310).

¹¹ The ESCS variable is a synthetic index built by PISA specialists based on information supplied by students on several issues related to their socioeconomic environment like their parents’ educational level and job qualifications or possessions related to culture in the household.

¹² These values were as much as 18% in some cases.

¹³ The significance of the parameters does not vary with respect to the main variables of interest. The results for the other quantile estimations are available upon request.

Additional information

Funding

This work was supported by the Ministerio de Economia, Industria y Competitividad [ECO2017-83759-P] and the Saving Banks Foundation (Fundación de las Cajas de Ahorros –FUNCAS-).