The effect of high school only financial education on financial literacy, financial knowledge, and adult financial outcomes: Some treatment effect evidence from the National Financial Capability Study

Abstract To the extent that individual financial literacy is important, the expected declining share of students attending and completing college suggests high schools will have an increasingly outside role in imparting individual financial literacy. In this paper, we consider whether high school only financial education enhances financial literacy and knowledge, and whether it has a beneficial impact on adult income, securities ownership, and home ownership. With data from the National Financial Capability Study, we estimate high school financial education only treatment effect parameters of outcome specifications that mitigate the effect of unobservables and selection into treatment. Our parameter estimates reveal that high school financial education has favorable treatment effects—possibly causal—on financial literacy and self‐reported financial knowledge. With respect to income and individual decisions to invest in securities and purchase a home, high school only financial education has no overall treatment effect. Our results suggest that high school financial education may not sufficiently impart that today's youth will live longer than previous cohorts, with a longer period of post‐retirement life that requires more consumption. This may fail to induce participants in high school financial education to set goals for investing in assets and careers that can finance post‐retirement consumption. Understanding financial strategies for financing post‐retirement consumption should perhaps be made an explicit learning outcome in a strengthened high school financial education curriculum.