Causal Effects of Financial Education Intervention Aimed at University Students on Financial Knowledge and Financial Self-Efficacy
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AuthorSalas Velasco, Manuel
Financial educationFinancial literacyFinancial self-efficacyCausal mediation analysisRandomized controlled experiment
Salas-Velasco, Manuel. 2022. Causal Effects of Financial Education Intervention Aimed at University Students on Financial Knowledge and Financial Self-Efficacy. Journal of Risk and Financial Management 15: 284. [https://doi.org/10.3390/jrfm15070284]
SponsorshipFUNCASEDUCA Program EF021/2018
Based on a randomized controlled experiment among final-year undergraduate students, we provide an assessment of the treatment effects of financial education intervention focused on debt-financed graduate education decision-making. Specifically, this study finds positive treatment effects on both college seniors’ objective financial knowledge and subjective financial knowledge and self-confidence (i.e., perceived financial self-efficacy). Individual financial well-being is thought to be enhanced by improved financial knowledge test scores and perceived financial self-efficacy. In addition, we carry out a causal mediation analysis to investigate the extent to which objective financial knowledge plays a mediating role in the effect of financial education treatment on the intervention outcome (perceived financial self-efficacy). The mediation proportion, the proportion of treatment effect on outcome explained by the intermediate variable of financial knowledge, is around 21%, which is important. Thus, policies that aim to improve financial capabilities among college students through financial education programs should be aware that financial literacy is a significant antecedent of (a prerequisite for) financial self-efficacy.
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