Freakonomics fans will already know that financial literacy is a hot issue for researchers – it’s in everybody’s best interest to get people making better financial decisions, but frankly, we’re not terribly good at it. The natural response is that if you just explain to people how to make better decisions, they’ll do it, but as we’ve heard in the podcast, it ain’t necessarily so. Just taking rational, clear-thinking adults and explaining how to make better financial decisions makes them feel good, but doesn’t necessarily help them make better decisions.
So we wondered if we could fix the problem by backing up the process and starting early, when kids were still in school. And we decided to do it in a place where people can use all the financial help they can get – Ghana, which has one of the lowest savings rates in Africa.
My colleagues Jim Berry, Menno Pradhan, and I set up a program through Aflatoun and Innovations for Poverty Action, where we could rigorously evaluate two different programs in 135 Ghanaian schools. Using random assignment, one group of schools was offered a basic financial education curriculum, another got the same lessons embedded in a broader social and emotional development curriculum to connect financial responsibility to broader life lessons, and a third comparison group got no intervention.
You can read about the programs here, where you can also vote in a contest to see if you can predict the outcomes. Based on what you’ve read here, what do you think we found?
Two winners will get a free copy of my book More Than Good Intentions or an annual digital subscription to Stanford Social Innovation Review.