Financial Education and the Debt Behavior of the Young

Meta Brown, John Grigsby, Wilbert Van Der Klaauw, Jaya Wen, Basit Zafar

Research output: Contribution to journalArticlepeer-review

133 Scopus citations


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.

Original languageEnglish (US)
Pages (from-to)2490-2522
Number of pages33
JournalReview of Financial Studies
Issue number9
StatePublished - Sep 1 2016
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics


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