Financial education interventions targeting immigrants and children of immigrants: Results from a randomized control trial

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Abstract

We document that immigrants in the United States differ from natives in several aspects relevant for their financial decision making. Based on these differences, we designed novel financial education materials targeted at US immigrants and their children and evaluated their effectiveness using a randomized control trial. To the best of our knowledge, this is the first rigorous evaluation of financial education programs targeted at this population. Compared to a control group, the groups that received the one-time educational intervention were more likely to correctly answer financial knowledge questions immediately after the intervention. The estimated effects of this one-time intervention on knowledge were large, but most of them faded away after six months. Moreover, we find little effect of the treatments on intended financial behavior measures, both immediately and six months later. Our results point to the efficacy of this type of educational material in informing immigrants and their children about important financial information that they are unfamiliar with, including information related to their immigrant status. However, they also suggest that a priority for future research should be to test whether repeated opportunities for learning can increase financial knowledge retention and lead to behavior change.

Citation

Relevant Evidence Summaries

The evidence was reviewed and included in the following summaries: 

What works to improve people’s financial capability?

Limited but strong evidence supports financial capability interventions. Studies with low-income populations find that financial capability interventions lead to numerous positive outcomes such as increased income and savings, better job placement and retention, higher credit scores, and progress toward financial self-sufficiency.   Certain characteristics of financial capability interventions can enhance their effectiveness. Bundled or integrated…

About this study

AGE: Adults

DIRECTION OF EVIDENCE: Inconclusive or mixed impact

FULL TEXT AVAILABILITY: Free

HOST COUNTRY: United States

HOST COUNTRY INCOME: High

INTERVENTION DURATION: One time

INTERVENTION: Financial education

OUTCOME AREA: Economic Empowerment

OUTCOME AREA: Financial Capabilities

REGION OF ORIGIN OF PARTICIPANT(S): North America

STRENGTH OF EVIDENCE: Moderate

TYPE OF STUDY: Impact evaluation

YEAR PUBLISHED: 2016

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