Does State-mandated Financial Education Affect Financial Well-being?

Does State-mandated Financial Education Affect Financial Well-being?

Jeremy Burke, J. Michael Collins, and Carly Urban

Working paper

GFLEC Working Paper

2023

This study estimates the causal effect of required high school financial education on young adults’ objective financial situation and subjective financial well-being. Subjective financial well-being includes people’s sense of their financial management, as well as their confidence in achieving their unique financial goals. Using variation in state financial education mandates for high school students across states and over time, this study shows that financial education improves subjective financial well-being and objective financial situations, especially among men and those who obtain college degrees. However, our results also suggest that individuals who end their education with a high school diploma actually have lower subjective financial well-being in states with mandated financial education, even though these students report they are less likely spending more than their income as young adults.