Absence of conflict of interest.
Citation
Highlights
- The study’s objective was to examine the impact of newly designed educational materials, adapted from the Federal Deposit Insurance Corporation’s (FDIC) Money Smart curriculum, on immigrants’ financial knowledge. This profile focuses on the comparison between the group receiving the general financial education curriculum and the control group. The authors investigated similar research questions for other contrasts, the profiles can be found here:
- The study was a randomized controlled trial conducted with members of RAND’s American Life Panel (ALP). Eligible adults were randomly assigned to a treatment group where they read general financial education materials, or to the control group where they did not receive any education materials. Using an online survey, the authors compared financial literacy knowledge between the treatment and control groups immediately after seeing the online materials (posttest) and six months later.
- The study found that individuals who read general financial education materials were significantly more likely than control group members to answer four general financial knowledge questions and one immigrant-specific question correctly at posttest. Treatment group members were also significantly more likely to answer one general knowledge question correctly at the six-month follow-up.
- This study receives a high evidence rating. This means we are confident that the estimated effects are attributable to the adapted Money Smart curriculum, and not to other factors.
Intervention Examined
Adapted FDIC Money Smart Curriculum
Features of the Intervention
The study authors modified the Money Smart curriculum created by the Federal Deposit Insurance Corporation (FDIC), creating two versions that could be administered online. The first version covered general financial topics such as reasons to keep money in a bank, the different types of financial institutions, savings tips, types of investment options (e.g., stocks, mutual funds), individual retirement accounts (IRAs), and 401(k)s. The second version included the general financial content from version 1 plus information relevant for immigrants. The additional information was presented in the form of Frequently Asked Questions (FAQs) and covered the documents needed to open a bank account, what happens to non-citizens’ retirement accounts if they leave the U.S., and if non-citizens have protection under the FDIC. First (participant was born abroad) and second (at least one of the participant’s parents was born abroad) generation immigrants in RAND’s American Life Panel (ALP) were eligible to participate in the program.
Features of the Study
All ALP panel respondents were invited to take a baseline survey between June and August 2011. The baseline survey served as a pretest and included ten questions to assess participants’ financial knowledge. First- and second-generation immigrants (ages 18 and older) who completed the baseline survey were invited to complete a second survey and participate in the experiment between September 2011 and February 2012. The authors randomized the 370 eligible participants who completed the survey to one of two treatment groups (treatment 1 or treatment 2) or a control group. There were 135 people in treatment group 1, 118 in treatment group 2, and 117 in the control group.
Treatment group 1 was shown general financial information (version 1), treatment group 2 was shown the same general financial information plus additional information relevant for immigrants (version 2), and the control group was not shown any financial information. The treatment group participants read the financial education materials (version 1 or version 2) and completed the posttest survey, while the control group only completed the posttest survey. Between April and August 2012, study participants were invited to complete the follow-up survey. The follow-up survey included the same ten questions to assess financial knowledge as the pretest and posttest surveys. Of the 370 randomly assigned people, 330 completed the follow-up survey six months later (123 in treatment group 1, 100 in treatment group 2, and 107 in the control group). The authors used statistical tests to compare the outcomes of the treatment and control groups.
Findings
Knowledge and skills for financial decision making
- At posttest, the study found that treatment group 1 participants were significantly more likely than control group participants to answer five financial knowledge questions correctly (the major difference between saving and investing, the Rule of 72 for interest rate calculations, knowing that mandatory IRA withdrawal starts at age 70½, knowing that an immigrant can have an IRA in the U.S., and understanding the benefits of employer matching for retirement accounts.)
- Approximately six months later, the study found that treatment group 1 participants were significantly more likely than the control group participants to answer one financial knowledge question correctly (a person aged 59½ who withdrew money from a standard retirement account would need to pay taxes).
Causal Evidence Rating
The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that any estimated effects are attributable to the adapted Money Smart program and not to other factors.