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Speech
Modernizing Our Payments System; Fourth Annual Financial Literacy Day: Understanding Global Markets and Finance
The Federal Reserve System plays an important role in helping to ensure that our payments system is efficient, secure, and effective. I recently became chair of the Financial Services Policy Committee (FSPC), which oversees the provision of payment services to depository institutions and the U.S. Treasury by the 12 Federal Reserve Banks. So as a follow-up to the discussion we just heard about new forms of payments, I thought it would be useful to provide you with an update on some of the Fed’s ongoing work to modernize the U.S. payments system, and then offer a policy maker’s perspectives ...
Journal Article
En español, por favor: 'Building Wealth' Now Available in Spanish
To empower Spanish speakers with the information they need to save and create wealth, the Federal Reserve Bank of Dallas has translated into Spanish its publication Building Wealth: A Beginner's Guide to Securing Your Financial Future.
Working Paper
Does Salient Financial Information Affect Academic Performance and Borrowing Behavior among College Students?
While rising student loan debt can plague college students future finances, few federal programs have been instituted to educate college students on the mechanics of student loan borrowing. This paper exploits a natural experiment in which some students received "Know Your Debt" letters with incentivized offers for one-on-one financial counseling. Montana State University students who reached a specific debt threshold received these letters; University of Montana students did not. We use a difference-in-difference-in-differences strategy to compare students above and below the thresholds ...
Speech
Remarks at Conference on Successful Strategies for Financial Literacy and Education
Remarks by Charles L. Evans, President and Chief Executive Officer, Federal Reserve Bank of Chicago Federal Reserve Bank of Chicago Chicago, IL
Working Paper
Financial Literacy, Risk Tolerance, and Cryptocurrency Ownership in the United States
Cryptocurrency owners without sufficient financial literacy and risk tolerance may be financially vulnerable, as the cryptocurrency market is highly volatile and lacks consumer protections. Our study divides cryptocurrency owners into three groups based on their purpose for holding cryptocurrencies—for investment only (investors), for transactions only (transactors), and for a mix of investment and transactions (mix users)—and examines how each group correlates with financial literacy and risk tolerance compared to consumers who do not own cryptocurrencies (nonowners). Using the 2022 ...
Working Paper
On the Complementarity of K-12 Personal Finance and Economic Education: Evidence from Online Modules
We compile data from 2.4 million economics and personal finance module assignments completed by 513,000 K-12 students on an educational online platform. We exploit variation in the order in which these students complete the modules–economics or personal finance first– to estimate directional spillovers. The spillover runs one way. Controlling for school demographics, students who take economics first score 3.42 points higher on personal finance post-tests; taking personal finance first raises economics post-tests by 0.15 points on the same specification. A placebo using exposure that ...
Report
Financial education and the debt behavior of the young
Young Americans are heavily reliant on debt and have clear financial literacy shortcomings, yet evidence on the relationship between financial education and youths? subsequent debt behavior remains both limited and mixed. In this paper, we study the effects of exposure to financial training on debt outcomes in early adulthood among a large and representative sample of young Americans. Variation in exposure to financial training comes from statewide changes in high school graduation requirements regarding financial literacy, economics, and mathematics that were mandated in the late 1990s and ...
Journal Article
D2D Tests Innovations on Prize-Linked Savings, Mobile Phone Applications, and Prepaid Cards for Financially Vulnerable Consumers
The Doorways to Dreams (D2D) Fund, a 15-year-old nonprofit headquartered in the Boston area, designs and develops innovations that strengthen the financial opportunity and security of financially vulnerable consumers. D2D?s innovations have included work on prize-linked savings (PLS),1 phone applications, and prepaid cards. D2D has also developed Financial Entertainment, a suite of casual video games that teach financial concepts. Cascade asked Timothy Flacke, executive director of D2D, about the organization?s latest work.
Journal Article
Delaware Financial Education Program Enlists State Agencies, Nonprofits, and Businesses
Stand by Me (SBM), a four-year-old program created to educate Delaware residents about personal finance and motivate them to achieve financial goals, is currently being implemented by four state agencies, seven nonprofits, and about 50 businesses. The program, which is a joint initiative of the Delaware Department of Health and Social Services and the United Way of Delaware, has the support of Delaware Governor Jack Markell ? a longtime proponent of financial education.
Journal Article
Spotlight on Research: The Influence of Financial Literacy on High-Cost Borrowing
Two topics have gained widespread attention in recent years. One is the rapid growth of high-cost borrowing offered by the alternative financial services (AFS) industry, such as payday loans, pawn shops, auto title loans, refund anticipation loans, and rent-to-own stores. The other topic is the efficacy of financial literacy on improving the overall financial well-being of individuals. A study by Annamaria Lusardi and Carlo de Bassa Scheresberg explores the characteristics of those who use high-cost borrowing and the influence of financial literacy on their borrowing behavior.1 The following ...