Evaluating School-Based Financial Education Programs: What Can We Learn from Field Evidence?

Recently, I attended “Conversations that Build and Strengthen Youth Economic Opportunities” hosted by Making Cents International. The event featured Hidde van der Veer of Aflatoun, a Dutch NGO providing social and financial education to children, and Aishwarya Lakshmi Ratan of Innovations for Poverty Action (IPA), an organization dedicated to discovering what works for the world’s poor. The speakers shared the preliminary results of their RCT evaluation of the efficacy of school-based financial education programs in Ghana, a country where YouthSave also operates. While their research measured only the short-term effects of these interventions, it nonetheless offers valuable insights into youth labor market participation, risk taking, and most importantly, savings behaviors and attitudes.

The Aflatoun program provides young children with social and financial education to “improve children’s savings habits as well as financial attitudes and self-esteem.” For this study, IPA conducted an evaluation of 5,000 primary school students aged 6-12 in semi-urban and rural areas. The participating schools were randomly assigned to three different groups: the Aflatoun program, Honest Money Box intervention (a group-savings scheme specifically created for the study), or a control group without treatment.

The Aflatoun curriculum in Ghana included lessons about planning, budgeting, saving, and other exercises aimed at increasing their self-esteem and understanding of children’s rights. In contrast, the HMB intervention solely focused on financial education with the intent to provide a direct comparison for Aflatoun’s social and attitudinal components.

To implement the two programs, teachers instructed two clubs comprised of students and delivered the assigned curriculum, in addition to providing a storage space for the money saved, usually in the teacher’s office. Students saved money from their pocket change and recorded transactions individually. IPA conducted the evaluation over the course of one school year. Between 20 and 40 children per school were chosen to participate in the survey. This evaluation is one of the first to use randomized control trial experiments to avoid spillover effects from altering the reliability and quality of the results. Below are some of the major outcomes from the program evaluation:

- Both of the programs successfully increased the savings take-up rate among the participants. In the control group, 51 percent of the students reported saving.

- Both Aflatoun and HMB increased this rate by about 4 percent. However, the overall positive effect on saving was small, with children moving their savings from other locations to school.

- Both programs had an impact on risk preference with children showing increased risk aversion when asked to allocate money between safe and risky options.

- The study found no effects on financial literacy (whether the child could think through a spending allocation), temptation goods (tendency to spend on temptation goods such as snacks and fun), personal investment (tendency to plan ahead), and spending wisely.

- HMB increased labor market participation, measured as the number of days worked. In the control group, 23 percent of children earned money. Both of the programs increased this rate by 4 percent.

- Both Aflatoun and HMB showed a positive effect on the children’s opinion about the following statement: “when something bad happens to someone it is usually his or her fault."

The outcomes of the evaluation are enlightening, but also raise questions for anyone developing youth savings products or related financial capability interventions. First, as financial literacy is considered important to the field of youth savings, what other methods of implementation have been used or could be used to increase youth's financial knowledge? Second, do children internalize these lessons to adapt this into their long-term behavior in a way that helps them continue the habit of saving? Third, how can organizations adapt these programs to the local savings culture to maximize their impact?

Similar program evaluations can help us answer many of the questions coming from youth savings interventions and indicate an increase in the availability of empirical evidence upon whether, when, and how to invest resources in promoting youth savings. We hope the results of YouthSave’s broader learning agenda – from an impact study in Ghana to testing text message-based financial education in Colombia and more – help build out this emerging body of knowledge on the potential impact of saving on youth.

This research can furnish the youth savings community with valuable information, provided that practitioners and researchers can apply the findings to different societies and cultures. If you would like to find out more about the event, a 10-minute video is available as well as the PowerPoint presentation with their findings.