TY - JOUR
T1 - Financial Education and the Debt Behavior of the Young
AU - Brown, Meta
AU - Grigsby, John
AU - Van Der Klaauw, Wilbert
AU - Wen, Jaya
AU - Zafar, Basit
N1 - Publisher Copyright:
© 2016 The Author 2016. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved.
PY - 2016/9/1
Y1 - 2016/9/1
N2 - Young Americans are heavily reliant on debt and have clear financial literacy shortcomings. 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. Using a flexible event study approach, we find that both mathematics and financial education, by and large, decrease reliance on nonstudent debt and improve repayment behavior. Economics training, on the other hand, increases both the likelihood of holding outstanding debt and the prevalence of repayment difficulties. Received July 9, 2014; accepted December 5, 2015 by Editor Stefan Nagel.
AB - Young Americans are heavily reliant on debt and have clear financial literacy shortcomings. 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. Using a flexible event study approach, we find that both mathematics and financial education, by and large, decrease reliance on nonstudent debt and improve repayment behavior. Economics training, on the other hand, increases both the likelihood of holding outstanding debt and the prevalence of repayment difficulties. Received July 9, 2014; accepted December 5, 2015 by Editor Stefan Nagel.
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U2 - 10.1093/rfs/hhw006
DO - 10.1093/rfs/hhw006
M3 - Article
AN - SCOPUS:85010764337
SN - 0893-9454
VL - 29
SP - 2490
EP - 2522
JO - Review of Financial Studies
JF - Review of Financial Studies
IS - 9
ER -