Financial Education & Account Access Among Elementary Students · -10 -5 0 5 10 15 20 25 30 0 5 10 15 20 25 30 35 40 Net Deposits by Week - Eau Claire 3-week moving average ($) Education

1 FINANCIAL EDUCATION AND ACCOUNT

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AMONG ELEMENTARY STUDENTS

Financial Education & Account Access

Among Elementary Students April 23, 2014

Brought to you by

CFED and the Center for Financial Security

at the University of Wisconsin-Madison


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Our Presenters

Louisa Quittman Director, Financial Education

Office of Consumer Policy US Department of the Treasury

Kasey Wiedrich Senior Research Manager

CFED

Laura Rosen OpportunityTexas Coordinator

Center for Public Policy Priorities

Jennifer McHugh Community Relations

Manager Royal Credit Union

Elizabeth Odders-White Associate Professor

Wisconsin School of Business CFS Affiliate


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Study aims to better understand how to provide

children with the financial skills to become

economically successful

• Focus on elementary-age students

• Rigorous examination of financial education

combined with financial access


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Financial Education + In-School Banking

Eau Claire, Wisconsin Population, 2010: 65,883 Median household income, 2007-11: $42,226 Unbanked Households, 2009: 5.4% Economically Disadvantaged Students, 2011-12: 41%

Amarillo, Texas Population, 2010: 190,695 Median household income, 2007-11: $44,769 Unbanked Households, 2009: 10.3% Economically Disadvantaged Students, 2011-12: 69%

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Partners • U.S. Treasury Department, Office of Consumer Policy

• CFED

• Center for Financial Security, University of Wisconsin-Madison

• Implementation Partners

Eau Claire

• Eau Claire Area School District

• Royal Credit Union

Amarillo

• Opportunity Texas

• Texas Council for Economic Education

• Amarillo Independent School District

• Happy State Bank

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Research Questions

What is the impact of financial education and in-school account access, alone and in combination, on students:

– Financial Knowledge

– Attitudes towards savings and financial institutions

– Behavior, e.g. opening and using bank accounts

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Financial Education • 5 or 6 lessons from Financial Fitness for Life

curriculum

• Content focused on Savings Account Use – Defining income, expenses and savings

– Wants vs. needs, incentives and goals

– Explain budgets and savings plans

– Compare savings options and understanding interest

• 45-minute lessons taught by classroom teachers – Teachers trained for 3 to 8 hours on curriculum and materials


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1st Year in 4th & 5th Grade Classrooms – Eau Claire

Student Baseline Survey (in class): financial knowledge, attitudes and

behavior

Student Follow-up Survey (in class): identical to baseline

survey

Schools with In-School Branches

50% financial education

50% no financial education

Schools w/o In-School Branches



Control Group receives financial

education

Research Design


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Student Baseline Survey (in class): financial knowledge, attitudes and

behavior


survey

Schools with In-School Branches



Schools w/o In-School Branches



Control Group receives financial

education

Research Design


survey

Follow-up Survey for Eau Claire 5th Graders (in class): received treatment 1 year previously as 4th graders

2nd Year in 4th Grade Classrooms – Eau Claire & Amarillo


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Offer of Happy State Bank Accounts

Schools with Happy State Branch

(randomly assigned)

50% $25 “seed” deposit

50% no $25 “seed” deposit

Amarillo Pilot (Smarter Texans Save)

“SEED” Deposit

Research Design


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• Established in 1993 • Currently operate 27

school sites • 17 elementary • 5 middle schools • 5 high schools

• 6 dedicated staff, 8 branch staff, 350 student team members

• 17,874 transactions last

school year

• Video introducing School $ense

https://www.youtube.com/watch?v=7g3fS2499EE




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In-School Banking, Eau Claire • Royal Credit Union School $ense

– Account Type: Joint ownership savings account

– Frequency: Open once a week during the school day

– Bank Transactions: Kids can make deposits and

withdrawals at school branch

– Student Staffing: Student tellers work with RCU staff

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Why we wanted to participate in the study • Financial education in the classroom • Need for research • Staff development


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In-School Banking, Amarillo • Happy State Bank Kids’ Banks

– Account Type: Joint ownership savings account (also opened minor-only account for the pilot)

– Frequency: Every 2-3 weeks (once a week during study period)

– Bank Transactions: Kids can only make deposits at school branch

– Student Staffing: Student tellers work with HSB staff (timing of research didn’t allow for student staffing during the study)

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Amarillo In-School Banking Take-Up

Total Accounts Opened (all grades) 615

Account Take-up (4th grade) 38%

With $25 “Seed” Deposit Offer

43%

Without $25 “Seed” Deposit Offer

32%

“Seed” Deposits Distributed 254

Value of “Seed” Deposits Distributed $6,350

Schools Continuing Kids’ Bank in 2013-14

15 (83%)

Participation data is for study period, January 15 – June 7, 2013. Take-up percentages don’t include students at three elementary schools with existing Kids’ Banks. Total “Seed” deposits are for all 18 schools with Kids’ Banks.


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• Account Take-up by School

– Account take-up range: 20% - 60%

– On average, the same or higher take-up in schools with more economically disadvantaged students

• Account Type

– Child only: 26%

– Joint: 74%

– At two schools, majority of accounts were child only

Amarillo In-School Banking Take-Up


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Insights and Successful Practices to Operating an In-school Banking Program

• Marketing is key to student participation, but keep materials

simple

• Campus administration and staff support is critical to program’s success

• Have school district market in-school banking program to students

• Offer accounts that meet the needs of all families


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Amarillo Teacher Feedback

Kids’ Bank: • Nearly all positive feedback from teachers • Students excited about saving & Kids’ Bank

participation brought concepts taught to life Students’ Level of Understanding: • Students initial level of understanding was very

limited • Items discussed in lessons should take into

consideration students’ income levels


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RESULTS

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Data Knowledge

• Financial Quiz Score: The number of questions answered correctly out of 13 questions

Attitudes

• Spend Money Immediately: 5-point scale how often they find it hard to avoid spending money immediately

• Easy to Save: 5-point scale how often they find it easy to save money

• Saving is for Adults: 5-point scale how often they feel that saving money is only for adults

• Banks Useful to You: 5-point scale the degree to which they believe that banks offer services that are useful to them

Banking Activity

• Banked: Students report whether or not they have a bank account in their own name

• Net Deposits: Total amount of money that is deposited into the account net of the total taken out of the account

• Active Account Use: Number of distinct occasions on which money is deposited or withdrawn from the account

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Sample Size & Results

• Overall Results

– Large effects of education on knowledge questions

– Moderate effects of in-school banking and education on attitudes

– Education and bank access boost bank account ownership by kids

– Effects persist

Sample Size Eau Claire Amarillo Total

No Financial Education 320 285 605

Financial Education 380 418 798

Total 700 703 1,403

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Financial Quiz Scores Increased with Education

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

Baseline Follow-up

No Financial Education (605) Financial Education (798)

5.00

5.50

6.00

6.50

7.00

7.50

8.00

Baseline Follow-up

No Bank (677) Bank in School (731)

• Financial education appears to produce a large improvement in financial knowledge—an increase

in the number of correct questions between 1.8 and 2.0

• Students with bank accounts show stronger effects in terms of changes in learning, but not

randomly assigned

• No evidence that having a bank branch in the school has an added effect on learning


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Attitudes About Financial Institutions Improved

3.50

3.55

3.60

3.65

3.70

3.75

3.80

3.85

3.90

Baseline Follow-up


3.60

3.70

3.80

3.90

4.00

4.10

4.20

Baseline Follow-up


It’s Easy to Save Banks Are Useful

• Positive effects of education and having a branch in school on attitudes

about saving and banks, with strongest effects from financial education


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Increase in Being Banked from Education, Incentives

0.40

0.45

0.50

0.55

0.60

0.65

0.70

Baseline Follow-up


0.30

0.35

0.40

0.45

0.50

0.55

0.60

0.65

0.70

0.75

0.80

Baseline Follow-up

No Bank (658) Bank in School (706)

• Financial education increases the number of banked students by about 3.5%

• The likelihood of a student having a bank account was highly correlated with the

presence of in-school financial services

• $25 incentive causes about an 18.1% marginal increase in students opening accounts

Banking Status of Student


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Net Bank Deposits Rising (Eau Claire)

-15

-10

-5

0

5

10

15

20

25

30

0 5 10 15 20 25 30 35 40

Net Deposits by Week - Eau Claire 3-week moving average ($)

Education

• Net deposits were higher on average (by about $7.69) after education, but

not significant statistically

• In-school banking access is related to students more actively using

accounts


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Persistence of Treatment Effects

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

Baseline First Follow-up Second Follow-up

Outcomes for the Treatment Group

Quiz Score (13pt) Student banked

Spend money immediately (5pt) Easy to save (5pt)

Saving is for adults (5pt) Banks useful to you (5pt)

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

Before Immediately After

Long After

Net Deposits

Control Treatment


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Key Findings • Education – Relatively brief educational intervention has

impact on knowledge

• And it lasts at least from 4th to 5th grade

• Being banked intensifies the effect

• Banked students are likely different…but banks in schools and incentives facilitate account ownership

• Attitudes about financial institutions strongly influenced

• By education and even just having a branch in school

• Account use proved hard to measure stably

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Policy and Practice Implications • Classroom-based financial education can increase knowledge

– Requires support to implement but is feasible if strategically developed

– Potential of external support / community partnerships

• In-school banking access has direct and indirect impacts on attitudes about financial institutions and on having an account.

– Incentives to start an account are clearly helpful, but add to costs

• Financial institutions need guidance on children savings marketplace

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Questions?

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Resources

• Treasury Notes blog http://www.treasury.gov/connect/blog/Pages/Promising-Hands-on-Financial-Education-Strategy.aspx

• CFS Publications http://www.cfs.wisc.edu/briefs/Financial_Education_and_Account_Access_Among_Elementary_Students-_Brief_April14(2).pdf

• CFED Inclusive Economy Blog http://cfed.org/blog/inclusiveeconomy/lessons_from_the_field_connecting_school-based_financial_education_and_account_access_in_amarillo_tx/

For materials used in the pilots, visit:

• OpportunityTexas, Smarter Texans Save http://opportunitytexas.org/about-us/current-initiatives/smarter-texans-save

Download the full report and briefs at:

http://www.treasury.gov/connect/blog/Pages/Financial-Capability-Building-Strategies-for-Low-Wage-Workers.aspx

http://www.treasury.gov/connect/blog/Pages/Promising-Hands-on-Financial-Education-Strategy.aspx













http://www.cfs.wisc.edu/briefs/Financial_Education_and_Account_Access_Among_Elementary_Students-_Brief_April14(2).pdf






http://cfed.org/blog/inclusiveeconomy/lessons_from_the_field_connecting_school-based_financial_education_and_account_access_in_amarillo_tx/






http://opportunitytexas.org/about-us/current-initiatives/smarter-texans-save










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Thank you for attending today’s webinar:

Financial Education & Account Access

Among Elementary Students

This archived webinar and PowerPoint presentation will be available for viewing on the CFS and CFED websites.

https://cfed.org www.cfs.wisc.edu/

Please contact Hallie Lienhardt [email protected] or 608-890-0229 with questions

http://www.cfs.wisc.edu/



mailto:[email protected]

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Financial Education & Account Access Among Elementary Students · -10 -5 0 5 10 15 20 25 30 0 5 10 15 20 25 30 35 40 Net Deposits by Week - Eau Claire 3-week moving average ($) Education