Absence of conflict of interest.
Citation
Highlights
- The study’s objective was to examine the impact of a demonstration program on financial literacy knowledge and behaviors.
- The study was a randomized controlled trial. Using telephone survey data, the authors compared differences in outcomes between the treatment and control groups.
- The study found no statistically significant relationships between the program and financial literacy knowledge or behaviors.
- The study receives a low evidence rating. This means we are not confident that any estimated effects would be attributable to the program; other factors would have likely contributed. However, the study did not find statistically significant effects.
Intervention Examined
Financial literacy sessions
Features of the Intervention
A major bank initiated a demonstration program to increase financial literacy and asset accumulation of low and moderate income adults. In collaboration with an unnamed partner, the bank created materials for six 2-hour financial literacy sessions. The sessions included information on balancing a checkbook, using credit, and banking online. The sessions were held in existing computer labs at community-based organizations. To overcome the digital divide, all program participants received a free computer and printer, and Internet access for one year. Based on an initial assessment conducted by the bank, participants with only beginning computer skills were required to take computer classes, which provided instruction on basic computer skills as well as Internet skills. Those with at least some experience with computers could opt out of the computer classes.
The bank conducted the demonstration project at five sites: three in Boston, Massachusetts; one in Newark, New Jersey; and one in New York, New York. Bank employees were responsible for talking to and recruiting customers for the program. Individuals were eligible for the program if they were a customer at the bank for at least six months, self-reported that their income was low or moderate, lived in the area served by the bank branch, and did not have a computer at home.
Features of the Study
The study was a randomized controlled trial at two of the demonstration sites. The authors randomly assigned 222 participants to the treatment group and 134 participants to the control group. Participants in the treatment group received the financial literacy intervention. Participants in the control group received nothing initially but received the program nine months later. The Center for Survey Research and Analysis at the University of Connecticut conducted the baseline survey via telephone and the follow-up survey one year later. Of the original sample at randomization, 243 completed the baseline telephone survey (159 from the treatment group and 84 from the control group). The majority of the study sample was female (80%), unmarried (80%), and African American (70%). Slightly over half were single parents (52%), 20% did not work in the past year, 15% received public assistance, and the average annual income was just under $20,000. The authors used statistical models to compare the outcomes of treatment and control group members.
Findings
Knowledge and skills for financial decision making
- The study found no statistically significant relationships between the program and financial behavior or financial knowledge.
Considerations for Interpreting the Findings
Although the study was a randomized controlled trial, it had high attrition. Participants in the treatment group were less likely to complete the follow-up survey compared to control group participants. Therefore, the study is not eligible for a high causal evidence rating. Additionally, the groups were significantly different at baseline in composition by gender and it is unknown if the authors controlled for these baseline differences in their statistical models. Lastly, no information was provided about the average age of each study group, as required by the protocol.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because it is a randomized controlled trial with high attrition and the authors did not ensure that the groups being compared were similar before the intervention. This means we are not confident that any estimated effects would be attributable to the program; other factors would have likely contributed. However, the study did not find statistically significant effects.