Finance for All: Experimental Effects of a Financial Literacy Program

Last registered on September 04, 2023

View Trial History

Pre-Trial

Trial Information

General Information

Title

Finance for All: Experimental Effects of a Financial Literacy Program

RCT ID

AEARCTR-0011650

Initial registration date

August 31, 2023

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

September 04, 2023, 6:48 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country

Portugal

Region

Primary Investigator

Name

Diogo Mendes

Affiliation

Stockholm School of Economics

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Miguel A. Ferreira

PI Affiliation

Nova School of Business and Economics

Contact Investigator

PI Name

André F. Silva

PI Affiliation

Federal Reserve Board

Contact Investigator

PI Name

Gonçalo Vieira da Luz

PI Affiliation

London School of Economics

Contact Investigator

Additional Trial Information

Status

In development

Start date

2023-09-01

End date

2025-12-31

Keywords

Education, Finance & Microfinance

Additional Keywords

Financial Literacy, Household Finance, Labor Market Outcomes, Spillovers

JEL code(s)

G53

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

Financial education is a key priority of the policy agenda aimed at fostering financial inclusion and enhancing economic and development outcomes. While academic research on the impact of financial education on financial knowledge and decisions have been rapidly expanding, most of the evidence focuses on low-income individuals and developing economies (Kaiser, Lusardi, Menkhoff, and Urban, 2022). However, having the necessary knowledge, skills, and attitudes to make good financial decisions is not just relevant for this group of people or countries. For instance, a recent survey conducted by the European Commission highlighted the urgent need to improve financial literacy in the European Union (EU), with only 18 percent of citizens demonstrating a high level of financial literacy (European Commission, 2023). In this project, we have the ideal setting to conduct a randomized controlled trial (RCT) on financial education in a developed OECD country (Portugal), targeting mainly middle-income individuals, with the adults spread throughout the country. Indeed, Portugal ranked last among EU members in the latest European Commission’s financial literacy ranking, and national authorities such as the country’s central bank (Banco de Portugal) and other government agencies have put forward different strategies to increase financial and digital literacy levels.

We plan to conduct an RCT using a financial literacy program named “Finanças para Todos” (i.e., Finance for All) to be implemented by the Finance Knowledge Center of the Nova School of Business and Economics. A pilot of the program took place during the 2022/2023 academic year, which had around 700 participants attending in person or online and was highly successful in terms of demand for the program and feedback received. Our experimental design consists of randomly allocating participants to a treatment group that is assigned to attend the financial literacy program (in-person or online format) or a control group that is not assigned to attend the training.

All individuals in the sample had previously self-enrolled into the program following an outreach campaign using different news outlets in the country. Our sample consists of over 5200 participants of which 66% are women, 74% have attained some higher education level, 76% have some type of credit product, and 44% have a household income higher than 2000EUR. The average age is 40 years.

External Link(s)

Program website

Registration Citation

Citation

Ferreira, Miguel A. et al. 2023. "Finance for All: Experimental Effects of a Financial Literacy Program." AEA RCT Registry. September 04. https://doi.org/10.1257/rct.11650-1.0

Sponsors & Partners

There is information in this trial unavailable to the public. Use the button below to request access.

Request Information

Experimental Details

Interventions

Intervention(s)

We will evaluate the impact of attending the financial literacy program “Finanças para Todos” (i.e., Finance for All) implemented by the Finance Knowledge Center of the Nova School of Business and Economics. The financial literacy training consists of a 5-session course (1:45h each) running over 5 consecutive weeks. The training will take place during the 2023/2024 academic year. Participants can sign-up for in-person (at Nova SBE campus in Carcavelos, Portugal) or online classes through Teams/Zoom.

The course contents have been designed by the research team in partnership with CFA Society Portugal and will be administrated to an audience with basic/intermediate financial knowledge. The contents of the course include financial planning, savings, credit and indebtedness, financial products, investment and retirement, banking and insurance products, and digital financial literacy. When designing the contents, we took several measures to address the concern that participants may lack the necessary knowledge considering the course contents, and consequently which financial decisions would be optimal to their own situation: (i) the contents of the course have been designed taking into account the best practices in financial literacy training (e.g., the financial literacy materials developed by the Global Financial Literacy Excellence Center in the US and by Portugal’s National Plan for Financial Education that was launched in 2011 by the country’s three financial supervisors); (ii) we follow an agnostic and comprehensive approach in the development of the materials considering the Portuguese context and participants’ socio-demographic characteristics; (iii) no ‘one-size-fits-all’ prescription is conveyed.

Intervention Start Date

2023-10-01

Intervention End Date

2024-05-31

Primary Outcomes

Primary Outcomes (end points)

We primarily plan to evaluate the impact of attending the program “Finanças para Todos” in credit outcomes—that is, access to, use of, and performance of different consumer credit products such as credit cards, auto loans, and other consumer loans, as well as overdrafts and mortgages. We have secured access to the Portuguese credit register data for individuals through Banco de Portugal.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

In addition to the primary outcomes focused on credit decisions, we also plan to analyze the effect of the program on the following outcomes, depending on the availability of data—at the time of this trial registration, we have not yet secured access to administrative data for these outcomes or funding to conduct monetary-incentivized follow-up surveys:
- Financial literacy and knowledge retention;
- Financial inclusion i.e., access to and usage of a bank account;
- Labor market outcomes e.g., job switching and business creation;
- Consumption and savings decisions;
- Housing (e.g., owning vs. renting);
- Investment behavior (e.g., diversification) and the use of different financial products (e.g., insurance, investment in public market securities (e.g., stocks, bonds, ETF));
- Recourse to personal bankruptcy and debt renegotiation processes;
- Spillovers through personal networks e.g., family;
- Spillovers to businesses through employment or firm ownership linkages;

We also plan to evaluate the differential efficacy of the in-person vs. online format on immediate knowledge acquisition (in-class assessment) and on knowledge retention (follow-up surveys). The potential impact on the outcomes outlined above can also be affected by the participation format (heterogeneous effects). Finally, we plan to evaluate if there is a differential impact of the program along the gender, education, region, wealth, and income dimension (differences in knowledge acquisition, retention, and outcomes). For this reason, these socio-demographic characteristics will be included in the strata.

Secondary Outcomes (explanation)

Experimental Design

1. A pilot of the program “Finanças para Todos” took place in the academic year 2022/2023, with around 700 participants enrolled.
2. New participants have applied to participate in the program following highly visible TV (e.g., CNN Portugal, SIC) and social media coverage. The recruitment into the sample has been done by self-enrolment by the participants.
3. The applicants received an e-mail during August 2023 to confirm their willingness to participate. Alongside the questions on availability and willingness to participate, we survey the participants on socio-demographic characteristics, financial profile, and financial literacy questions. Participants are informed that the program is part of a research study and a confidentiality agreement is signed at the time they submit their survey answers.
4. Random assignment (see details below) into treatment and control group will take place in September 2023. All participants will be informed about the outcome of their application in the same month.
5. The intervention takes place between October 2023 and May 2024. Each cohort attends 5 sessions of 1h45 each (1 session per week over 5 consecutive weeks) either in-person or online according to their preferences and available slots.
6. Exit and online follow-up surveys will be conducted after the training (monetary incentives are conditional on securing additional funding).

The intervention targets adult residents in Portugal who have signed up to attend the program “Finanças para Todos”. The intervention takes place in Portugal.

Experimental Design Details

Not available

Randomization Method

Randomization done by the research team in office by a computer (using Stata).

Randomization Unit

Randomization will be conducted at the individual level. Randomization with strata will be performed along the following characteristics: (1) gender; (2) sign up for in-person or online format; (3) household income below/above €2,000; (4) education below/above undergraduate degree; (5) participant has any type of credit at the time of registration.

Was the treatment clustered?