Business, College of


Date of this Version



A DISSERTATION Presented to the Faculty of The Graduate College at the University of Nebraska In Partial Fulfillment of Requirements For the Degree of Doctor of Philosophy, Major: Economics, Under the Supervision of Professor William B. Walstad. Lincoln, Nebraska: May 2015

Copyright (c) 2015 Jamie Frances Wagner


This study estimates how financial education affects a person’s financial literacy score, short-term financial behaviors, and long-term financial behaviors using data from the 2012 National Financial Capability Study (NFCS). There are seven categories of financial education—high school, college, employer, high school and college, high school and employer, college and employer, and combinations of all three courses—to estimate the effectiveness of financial education. This course detail has not been studied in previous literature about financial education.

Financial education has a positive relationship with a person’s financial literacy score. Splitting the sample into groups based on education and income results show that people with low education and income have larger course coefficients compared to people with high education and income.

Financial education has mixed effects on short-term behaviors. These behaviors have almost immediate feedback, such as added interest charges from not paying off a credit card in full that month. Financial education may be less effective for short-term behaviors because people are able to learn about them through life experience and their understanding may depend less on formal instruction. There are, however, positive effects of financial education for short-term behaviors for people with low education and income, suggesting that financial education is effective for people who may need formal instruction to learn the basic short-term behaviors.

Financial education appears to have a positive effect on long-term behaviors. These behaviors do not have immediate feedback. For example, retiring happens many years in the future and if a person incorrectly estimates how much they need or does not save at all, there is no way to fix this mistake. The long-term behaviors are less susceptible to learning through experience and therefore may be influenced with formal instruction.

The findings suggest that there are benefits to financial education, but the extent of the benefits may depend on the time horizon for changing financial behaviors. These findings will aid financial education programs. Financial education has the most positive relationship with financial literacy and long-term behaviors and a mixed relationship with short-term behaviors. Another key finding from this research is that people with low levels of financial literacy seem to benefit more.

Adviser: William B. Walstad