Employment and Financial CapabilityExperiences of John Hancock Summer Youth Employment Program Participants

About this report Each summer John Hancock sponsors the MLK Scholars program, a summer employment program for teens. Young people ages 16 to 18 participating in the program work at least 20 hours per week in positions at nonprofit organizations and businesses throughout Boston. Participants also participate in leadership forums and bi-weekly personal development sessions. In addition to employment and this programming, summer employment participants have access to the John Hancock Well-Being Education Center, a one-of-a-kind digital education program featuring financial and mental wellness resources for young adults. Since 2018, the Education Center has been a resource not just for participants in the MLK Scholars program, but for all youth participating in summer employment programs supported by the Boston Private Industry Council and the City of Boston.

Through the John Hancock Well-Being Education Center, summer employment participants across Boston had access to 19 learning modules focused on personal finance topics ranging from financing higher education and savings, to identity protection and taxes. This year Education Center also provided mental wellness education to support participants during the Coronavirus pandemic. Alongside the education, young people were invited to complete a survey about their financial preparedness, the value of employment and financial education, and their plans for the future, including educational and financial goals. The program looked a little different in 2020, with most students working remotely as a result of the Coronavirus pandemic. Despite adaptations to the program, more than 600 youth working with organizations across Boston leveraged the John Hancock Well-Being Education Center this summer.

This research report summarizes the findings from 85 youth who responded to surveys between July and August, 2020. Where possible, comparisons are made to responses from a sample of Massachusetts high school juniors and seniors participating in EVERFI’s financial education course. Comparisons are drawn from responses collected before students began an EVERFI financial education course.

An additional 63 Summer Summer Employment Program participants responded to questions about the stress and satisfaction in their lives, and how their feelings have changed since the outbreak of Coronavirus in the U.S. Those responses are explored in the sidebar on page 12.

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Key findings of this report:

For the third year, young people participating in Boston summer youth employment programs reported a positive impact on their financial management confidence and plans from participating in both the education and employment opportunities provided by the program. A large majority of participants reported feeling more prepared to manage their money than they did before participating in the program.

This report will explore updated findings and reflect on the past few years of the Summer Youth Employment Program and the John Hancock Well-Being Education Center. In addition to the positive impact of employment and financial education, the report discusses the attitudes and experiences of program participants, including their financial confidence and their future plans and financial goals.

• (Page 2) Employment and Education. A substantial majority of participants (77%) agreed that they feel more prepared to manage their money now than they did before the program. They agreed that both employment and education contributed to their preparedness: Seven in 10 participants agreed that receiving a regular paycheck has changed how they think about money and eight in 10 agreed that the education they received through the John Hancock Well-Being Education Center helped them manage the money they received.

• (Page 4) Financial Confidence and Management. Self-efficacy — the belief in one’s ability to overcome obstacles and achieve goals — is a critical component of financial capability. Consistent with prior years, this year’s Summer Youth Employment Program participants reported higher levels of financial confidence than their peers. A majority of participants also reported practicing or planning for good financial management habits, including the seven in 10 participants who said they already are or are planning in the next year to contribute to a college savings account.

• (Page 9) Future Plans and Financial Goals. As in prior years, a large majority of Summer Youth Employment Program participants reported plans to pursue college after they graduate from high school (93%). This number is up slightly, compared to 2019, and fewer participants this year reported that they plan to work (either exclusively or while in college): 46 percent of respondents this year, compared to 57 percent in 2019. Also up compared to last year is the share of participants who listed “avoid taking on new debt” as among their financial goals for the next five years. At 68 percent of participants counting it as a goal (compared to 58% last year), this is the primary financial goal again in 2020.

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Two-thirds of survey respondents (69%) were returning participants in the Summer Youth Employment Program. As in 2019, a substantial majority of participants — both new and returning — agreed that the program’s combination of employment experience and financial education positively impacted their readiness to manage money.

Experience with employment and education

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Summer Youth Employment Program participants agree that employment and education helped prepare them to manage their money.

Impact of employment and educationShare of respondents who agree or strongly agree.

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In a year when the participant experience was different, with many of the young people in the program working from home rather than in person as a result of the Coronavirus pandemic, it is significant that the value of the program remained high. In fact, there was an increase in the share of participants who found value in the education component of the program; nearly eight in 10 respondents agreed that the education they received helps them manage their money.

Regarding the impact of work experience on money management, more program participants with no prior work experience reported that receiving a paycheck changed how they think about managing their money. Among this group — those who reported that they had not held a job prior to their participation in the Summer Youth Employment Program and who are first-time participants in the program — 80 percent agreed or strongly agreed that receiving a paycheck changed their thinking about how to manage money.

Overall, three quarters (77%) of participants reported that they feel more prepared to manage their money than they did before participating in the Summer Youth Employment Program, up from 70 percent in 2019.

2020 2019

Receiving a regular paycheck has changed how I think about managing my money.

69% 69%

The education I receive through the Summer Youth Employment Program helps me manage my money.

79% 70%

I feel more prepared to manage my money than I did before starting the Summer Youth Employment Program.

77% 70%

While financial knowledge is foundational, financial confidence — the belief in one’s ability to make good financial decisions and follow through with action — is also a key component of financial capability and, ultimately, financial health.

Financial confidence and management

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The financial education Summer Youth Employment Program participants engaged with is designed to influence confidence by providing real-world scenarios and opportunities for learners to reflect on their personal situation and experience. To measure financial confidence, program participants were asked how prepared they feel to take on a series of personal financial management tasks that they may be navigating now, or could be navigating in the near future.

Prepared or Very Prepared

Neutral or Not Sure

Mostly Not Prepared or Not At

All Prepared

Select, open, and manage a checking or savings account. 68% 20% 12%

Read a paycheck and understand what determines your net (take-home) pay. 67% 28% 5%

Set up and follow a budget to manage spending and saving. 69% 21% 10%

Check your credit score and maintain good credit over time. 57% 31% 12%

Personal financial managementShare of participants who feel ____.

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Summer Youth Employment Program participants are more likely than the typical Massachusetts high school student to feel prepared for personal financial management.

Summer Youth Employment Program

Participants

Massachusetts High School Peers

Select, open, and manage a checking or savings account.

68% 52%

Read a paycheck and understand what determines your net (take-home) pay.

67% 51%

Set up and follow a budget to manage spending and saving.

69% 46%

Check your credit score and maintain good credit over time.

57% 29%

Summer employment participant self-efficacyShare of participants who are Prepared or Very Prepared.

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Among Summer Youth Employment Program participants, financial confidence is high. Two thirds of participants reported that they felt prepared or very prepared to select, open, and manage a savings or checking account; read a paycheck and understand what determines take-home pay; and set up and follow a budget. A slightly smaller share (57%) felt prepared to check their credit and maintain good credit over time.

Summer Youth Employment Program participants reported being more confident than their peer high school juniors and seniors across Massachusetts. The peer group, surveyed prior to taking an EVERFI financial education course, reported lower levels of preparedness across the board, but particularly in the area of understanding and maintaining credit, where Summer Youth Employment Program participants were almost twice as likely to report confidence in their ability.

Whether young people who participated in the Summer Youth Employment Program are simply more likely to possess financial confidence or whether program participation itself influenced confidence through its combination of experience and education opportunities or — very likely — both, Summer Youth Employment Program participants expressed significantly more readiness to manage their financial lives as they move toward adulthood and independence than did the typical Massachusetts high schools student.

One factor that is associated with higher financial confidence is engagement with the financial system. Among participants in the Summer Youth Employment Program, financial confidence was higher for young people who already have a savings account.

Have a Savings Account

Do Not Have a Savings Account

Select, open, and manage a checking or savings account. 90% 51%

Read a paycheck and understand what determines your net (take-home) pay.

88% 51%

Set up and follow a budget to manage spending and saving. 80% 63%

Check your credit score and maintain good credit over time. 68% 49%

Summer employment participant self-efficacyShare of participants who are Prepared or Very Prepared.

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Along with participation in the Summer Youth Employment Program, direct experience with the financial system is associated with greater financial confidence.

The gap between the account-holding group and their peers without accounts was biggest in the area of preparedness to select, open, and manage an account — not surprising, given the direct experience. There were also substantial differences in the other areas, including comfort understanding a paycheck, where just half of participants without a savings account felt prepared compared to nearly nine in 10 account-holding participants. Like participation in the Summer Youth Employment Program, direct experience with the financial system is positively associated with financial confidence.

Over half of Summer Youth Employment Program participants (56%) reported that they already have savings accounts, and an additional third planned to open an account within the next year. Even more participants reported having a checking account (66%), but just a quarter said they had a credit card (27%).

Regarding financial habits: Adding money to savings regularly, contributing to a college savings account, and following a budget, at least three quarters of Summer Youth Employment Program participants reported either that they are doing these things now, or that they plan to do them within the next year.

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I already do this I will do this

I might do this

I will not do this

Open a savings account (on my own or joint with a parent or guardian). 56% 31% 9% 5%

Open a checking account (on my own or joint with a parent or guardian). 66% 15% 14% 5%

Open a credit card account (on my own or joint with a parent or guardian). 27% 30% 26% 17%

Add money to your savings regularly (monthly, each paycheck, etc.). 41% 41% 14% 4%

Contribute to a college savings account. 28% 44% 23% 5%

Follow a budget to manage your savings. 34% 51% 14% 1%

Financial engagement and habits over the next year

The majority of Summer Youth Employment Program participants are currently engaged in, or plan to start, healthy financial habits like budgeting and saving.

Future plans and financial goals

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Have a Savings Account

Do Not Have a Savings Account

College only 90% 51%

College and Work 88% 51%

Work only 80% 63%

Other (military, unsure, no response)

68% 49%

Participant plans

Compared to last year, more 2020 Summer Youth Employment Program participants reported an intention to enroll in college (at a two-year, four-year, or online institution), and fewer reported plans to work, either full time or while in school.

As Program participants develop their financial confidence and habits to support financial health, they are also looking forward to post-high-school plans and future financial goals. As in 2019, the majority of Summer Youth Employment Program participants said they plan to attend college (93%).

Most Program participants plan to pursue college. Compared to last year, fewer plan to work while in school.

Early data suggests that the Coronavirus pandemic and its short-term effects on higher education — including virtual learning and immediate individual and institutional financial impacts — have led to lower enrollment in higher education. But research has found that economic recessions may lead to higher enrollment in the few years following the immediate economic crisis. As employment prospects shrink, young people may make the decision to pursue education or to enroll in school full-time instead of part-time.

Regarding their financial futures, consistent with 2019 responses, the most-cited financial goal for Summer Youth Employment Program participants was to avoid taking on new debt. 68 percent of respondents listed this among their financial goals, compared to 58 percent last year. The share of participants who want to save for a personal purchase (59%), for a car (59%), or to invest and increase their wealth (52%) also are up compared to last year.

Financial Goals for the Next Five Years

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2020 2019

Avoid taking on new debt 68% 58%

Save for a personal purchase for enjoyment. 59% 51%

Buy or lease a car. 59% 48%

Invest and increase my wealth. 54% 50%

Pay for education for myself or a family member. 52% 52%

Buy or rent a home. 40% 42%

Changes in financial goals may reflect a different cohort of participants in the Summer Youth Employment Program this year. It may also reflect shifting focus on or concern about financial futures in the face of economic challenges related to the Coronavirus pandemic. In particular, this group seems to be more concerned about managing debt and more averse to taking on new debt.

In order to achieve their financial goals, most Summer Youth Employment Program participants said they had taken steps toward achieving their goals; just 12 percent of participants said that they had “not taken any steps yet.” Over half of participants reported that they had started saving money (58%) or talked to a parent, guardian, or trusted adult about their financial goals (51%). Other steps toward financial goals include figuring out how much they will need to save each month in order to reach their goals (36%) and planning a budget to manage spending (42%), which fewer young people reported engaging in. This preference for saving to prepare — the most-cited step toward goals — is consistent with participants’ goals, particularly the increase in the share of participants who included saving for a pleasure purchase among their financial goals.

Reinforcing the value of the Summer Youth Employment Program, returning participants were more likely than their first-time peers to report taking steps toward achieving their financial goals. This is particularly true for savings-related steps: Two thirds of returning participants (63%) started saving money regularly, compared to about half (48%) of new participants. Similarly, 43 percent of returning participants and just 16 percent of new participants went through the process of figuring out how much they need to save each month to achieve their goals.

Across all measures — financial confidence, engaging with the financial system, establishing healthy financial management habits, and taking steps to achieve financial goals — Summer Youth Employment Program participants reported healthy behaviors and positive steps toward long-term financial well-being. In the case of financial confidence, participants substantially outpaced their Massachusetts high school peers. When it comes to taking steps toward achieving financial goals, repeated participation in the Program is associated with more proactive behavior. And when asked directly, participants affirmed the value of the combination of work experience and financial education for positivity impacting how they think about and approach financial management.

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Returning participants were more likely than their first-time peers to report steps toward achieving their financial goals.

COVID effects: stress and satisfaction

Satisfied Not Satisfied Stressed

Work 53% 30% 17%

Home (or living situation) 48% 31% 21%

Friends 42% 45% 13%

Family 40% 43% 17%

Personal financial situation 30% 49% 21%

School (or thinking about next school year) 6% 24% 70%

More satisfied or more stressed

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The Coronavirus pandemic made 2020 a challenging year for a lot of people, and participants in the Summer Youth Employment Program are no exception. Between health concerns, the difficulty of remote work and learning — or the risk of in-person work and learning — and financial challenges, stress and worry are playing a larger role in many of our lives.

More than half of Summer Youth Employment Program participants (59%) described themselves as satisfied or very satisfied with their day-to-day lives, considering work, school, home, family, and friends. But a similar number (57%) also described themselves as somewhat or very stressed. Work was a bright spot for Summer Employment Program participants — more participants reported being more satisfied than stressed with work, compared to all other categories — but there are challenges as well.