Financial Education Measures Are Effective: Germany Should Develop a National Strategy for Financial Education

DIW Weekly Report 38 / 2021, S. 287-294

Tim Kaiser, Lukas Menkhoff

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The OECD recommends its member countries implement national strategies for financial education. Many other countries, such as China and India, also have such strategies, whereas Germany does not. The strongest reason for rejecting such a strategy is the supposition that financial education interventions are ineffective. Using all available randomized experimental studies, this study investigates and unequivocally rejects this hypothesis. On average, financial education interventions are significantly effective and the extent is similar to comparable (educational) interventions. While it is possible that individual interventions may fail, these failures are exceptions. Overall, financial education works: It works also even if is short-lived, if its effectiveness is not verified for over a year, if circumstances are difficult, and if teaching approaches are conventional. The argument that financial education is ineffective is thus invalidated and, against this background, German policymakers can move forward in implementing the OECD recommendations.

Lukas Menkhoff

Head of Department in the International Economics Department

JEL-Classification: G53;I21
Keywords: financial education; financial literacy; financial behavior; meta-analysis