Allowances: Incidence in the US and Relationship to Financial Capability in Young Adulthood

This study describes the use of allowance payments by parents to children in the United States (US) and documents the association between receiving an allowance as a child and financial capability as a young adult. Based on the Panel Study of Income Dynamics, the majority of children in the US ages 6 to 15 receive an allowance in childhood. Allowances are a commonly used strategy by parents across many demographic and socioeconomic groups, with no strong relationship between parental income or education and parents offering an allowance. Young adults who received an allowance as children reported modestly higher levels of financial responsibility, suggesting that allowances for children and teenagers may be a useful complement to other financial development strategies for young people.

     

Financial Strain and Smoking

Using the 1999–2005 waves of the Panel Study of Income Dynamics (PSID), this study examines the relationship between family financial strain and smoking among women and men. Family financial strain is reflected by family financial solvency and the availability of emergency funds. Results indicate that individuals residing in families with insufficient emergency funds are more likely to smoke. Moreover, the relationship between insufficient emergency funds and smoking is observed across various income and education groups. Further analysis suggests that the onset of a financial strain increases their probability of a smoking relapse among men by 8–14% points.     

Developing Financial Management Training in Low-Income Communities

Abstract

As welfare policy contractions and declines in real wages have placed severe financial pressures on low-income families, programs to improve financial management practices and to help the poor accumulate assets have grown. This article examines the need for such programs and the implications associated with implementing two prominent training strategies-one that focuses solely on financial management training and another that combines such training with savings incentives.

Based on data from a large financial management training program, we find that knowledge deficits about basic financial issues are substantial, and that the type of financial training program offered has important implications with respect to the subgroups of low-income people likely to be served within a community. We discuss program issues critical to the implementation of such programs in low-income communities, with a focus upon more carefully attending to their participant empowerment and community development potential.     

Financial literacy education: An opportunity for colleges and sociology

Financial literacy represents the knowledge necessary to manage one's financial affairs in a way that contributes to overall wellbeing, yet financial literacy and financial education are understudied in sociology. While emerging adults have low rates of financial literacy overall, this article focuses on college students due to increasing college access and student loan debt. Based on the limited literature that assesses college financial literacy education, it appears that these types of programs may serve to advance college students' financial knowledge. Additional mechanisms that serve to develop college students' financial literacy include parent socialization, banking experience, and high school financial education programs. However, not everyone has the same access to these resources. Thus, given the magnitude of the US student debt crisis and persistent economic inequalities, college financial literacy education may prove beneficial for all students, particularly those from economically vulnerable backgrounds. This article serves as an invitation to sociologists to consider financial literacy education as both a worthwhile pursuit in application and as a research topic.     

Financial literacy and retirement planning in the Netherlands

The complexity of financial decisions that households now face has increased to unprecedented levels. At the same time, households seem to lack the financial knowledge to cope with these decisions, including how to save and invest adequately for retirement. In this paper, we examine the relationship between financial knowledge and retirement planning in the Netherlands. For this purpose, we have designed a module on financial literacy and planning for the De Nederlandsche Bank (DNB) Household Survey. We find a strong and positive relationship between financial knowledge and retirement planning; those who are more financially knowledgeable are more likely to plan for retirement. Using information on economics education acquired in school, we show that the nexus of causality goes from financial literacy to planning rather than the other way around.     

No Degree,No Job: Adolescent Mothers’ Perceptions of the Impact that Adolescent Fathers’ Human Capital has on Paternal Financial and Social Capital

Becoming an adolescent father truncates young males’ opportunities to complete high school and secure employment, which can hinder their capacity to contribute financial and social capital to their children. Based on 69 adolescent mother reports, results suggest that whereas employment status is associated with adolescent fathers’ physical and financial presence, high school completion is strongly associated with the nature and quality of parenting and co-parenting behaviors. Implications for school counselors, teachers, social workers, and future research are discussed.     

The Unnecessary Nudge: Education and Poverty Policy in a Cairo Slum

Drawing on data collected from 2008 to 2013 in a low‐income Cairo neighborhood, this article examines the impact of a poverty alleviation program, a conditional cash transfer (CCT ) that attempted to incentivize poor mothers, through a direct cash transfer, to send their children to school. The program met its goal. The mothers did send their children to school. I argue that only observing this outcome of school access, however, black‐boxes the causal pathway of how mothers sent their children to school in the Egyptian context, and how the program mattered. Public schools in Egypt are free on paper but expensive in practice due to an informal system of “private lesson” and “study group” fees imposed by teachers. Mothers had always managed this expense, using scarce gendered household resources, before, during, and after the program. Through ethnographic, interview, and survey data, this article shows that while the cash—transferred to the mothers and labeled for education—enabled the mothers to send their children to school, the program conditions were unnecessary. The mothers did not need to be nudged to send their children to school. This Egyptian case study has implications for the use of behavioral incentives and for the importance of qualitative methods to the study of policy impacts.     

Financial Education is not Enough: Millennials May Need Financial Capability to Demonstrate Healthier Financial Behaviors

Financial education sans opportunities for hands-on experience and knowledge operationalization may be insufficient for promoting healthy financial behaviors. Financial capability combines financial education with financial inclusion via a savings account, thereby giving an opportunity translate knowledge into practice. This study used data from the 2012 National Financial Capability Study to examine relationships between the financial capability and financial behaviors of United States Millennials (N = 6865). Compared to their financially excluded peers, Millennials who were financially capable were 176 % more likely to afford unexpected expenses, 224 % more likely to save for emergencies, 21 % less likely to use alternative financial services, and 30 % less likely to carry burdensome debt. Interventions that focus solely on financial education or inclusion may be insufficient for facilitating Millennials’ healthy financial behaviors; interventions should instead develop financial capability.     

The Impact of Personal Finance Education Delivered in High School and College Courses

This study investigates the impact of personal finance education delivered in high school and college. Outcomes of interest were investment knowledge and household savings rates measured years after the financial education was delivered. A web-based survey with questions about participation in financial education, financial experiences, income and inheritances, and demographic characteristics was administered to 1,039 alumni from a large midwestern university. Participation in a college level personal finance course was associated with higher levels of investment knowledge. Experience with financial instruments appeared to explain more of the variance in both investment knowledge and savings rates. No significant relationship between taking a high school course and investment knowledge was found. Financial experiences were found to be positively associated with savings rates.

Child Protection Workers’ Perspectives on the School-to-Work Transition for Young People in Care

Abstract

Young people in the care of the state are reported as having generally poor education and employment outcomes due to such factors as high rates of school exclusions and non-attendance, frequent placement moves with consequent school disruptions, deprived precare backgrounds, lack of coordination between education and child protection personnel, lack of attention to educational needs by professionals, and low expectations held by carers and caseworkers. The present article examines child protection worker perspectives on young people's transition from school to work. Caseworkers believe that, for young people in care, factors such as unstable placements, psychological and behavioural problems, inadequate vocational options, poor caseworker knowledge of available training and education, and negative perceptions of young people in care may impede them from making a successful transition from school. Research suggests that child protection caseworkers need to integrate education and work with leaving care planning, given it is vital to the future wellbeing of young people in care.     

Building Financial Knowledge Is Not Enough: Financial Self-Efficacy as a Mediator in the Financial Capability of Low-Income Families

ABSTRACT

Policymakers in many countries have taken an interest in population-level financial capability. Limited empirical work has examined how constructs that makeup financial capability relate and how they function for individuals with low incomes. Using a national sample of low-income Canadians, we investigate relationships between financial knowledge, financial self-efficacy, and savings outcomes. Overall, we find that financial self-efficacy fully mediated the relationship between objective financial knowledge and postsecondary-education saving. The association between objective financial knowledge and retirement saving and emergency saving passed through financial self-efficacy. Efforts to promote financial capability need to focus on more than objective financial knowledge.     

Effectiveness of Financial Education on Financial Management Behavior and Account Usage: Evidence from a ‘Second Chance’ Program

The Get Checking™ program is a “second chance” program that aims to provide financial education to consumers who were reported to ChexSystems by a previous financial institution for account abuse or mismanagement. Using data collected from Indiana participants of the program, the first goal of this study is to investigate the success of the program in impacting financial management behavior of the participants. The second goal is to investigate the change of participants’ actual behavior in terms of account usage and asset-building after the completion of the program. The findings show that the program was successful in positively influencing the financial management behavior of Non-whites in terms of recording transactions and communicating with financial institutions. Also, financial management skills emphasized in the program, especially communicating with financial institutions, have a significant positive effect on the actual behavior of the participants in terms of obtaining a loan. Among the heterogeneous group of the unbanked, findings shed light on the demographic groups, such as Non-whites and young adults that could benefit the most from this type of financial management education.

Young Children's Rights and Public Policy: Practices and Possibilities for Citizenship in the Early Years

There is a growing belief that young children should be involved in decisions that affect them. This belief has its foundations in a new model of the young child, in a new concern with young children's rights as citizens and in new knowledge about the significance of young children's early experiences. This article examines the increasing interest in involving young children in policy‐making and its rationale. It then presents two case studies from Australia of consulting young children in policy‐making, to show what consulting young children can offer children, policy‐makers and the wider community.     

What happens during and after school: Conditions faced by working parents living in poverty and their school-aged children

Past research has not looked directly at how parental working conditions are affecting the lives of school-age children living in or near poverty. This study examines the effects that the working conditions faced by low-income parents have on the care their school-age children receive and on parental involvement in their children's education and development. In-depth, semistructured interviews were conducted with 74 families with school-age children, including 44 families living at or below 150% of the federal poverty level and 30 families living above 150% of poverty. Teachers at every public afterschool program in the city were interviewed. One out of two low-income working parents faced barriers to becoming involved in their children's education. Two out of five faced barriers to participating in school meetings, school trips, or school events. Many parents had difficulty finding any time to spend with their children, let alone time to assist them with their schoolwork. The difficulties they faced are described in detail. Implications for educational and labor policy are discussed.     

Just another brick in the wall? The relationship between classroom-based political education and the political interest of young adults in Switzerland

This article asks whether political education at upper secondary school – i.e. shortly before or at the age when young people receive the right to vote – affects individual political interest as well as differences in political interest between social groups. Empirically, we use a novel data set combining individual student data with information on classroom-based political education as well as teacher characteristics. We do not find support for a more or less automatic and positive effect of classroom-based political education on young people’s political interest. Whereas we analyzed three dimensions of political education (knowledge, skills, arousing interest in politics), the skills dimension was the only one that exhibited a consistent positive (and mostly significant) relationship with young peoples’ political interest. Moreover, classroom-based political education seems not to compensate for a lack of political socialization at home but rather tends to affect students with politically interested parents most strongly.     

The Cost of Not Knowing the Score: Self-Estimated Credit Scores and Financial Outcomes

This study analyzes consumers’ knowledge of their own credit situation and tests whether a lack of knowledge affects financial outcomes. The unique dataset from survey and credit report data includes self-estimates of credit scores and actual scores from a low-to-moderate income sample. We argue and show empirically that many respondents don’t know their credit score and generally underestimate their creditworthiness. Furthermore, our evidence suggests that this biased self-assessment may explain differences in perceived credit constraints and credit contracts, specifically credit card interest rates. Our research suggests that an important aspect of financial literacy is self-assessment, and that it is important to encourage consumers to regularly check their credit reports and scores so as to better understand their actual creditworthiness.     

“Giant Leap 1”: A Social and Emotional Learning program's effects on the transition to first grade

This study analyzed how student characteristics influenced the effects of a Social and Emotional Learning (SEL) program implemented in the first grade. A total of 14 teachers and 228 children participated in the study: 144 children participated in the SEL intervention program (including 65 pre-school children, group II), and 84 children composed the control group. The pre- and post-test assessments involved hetero- (teacher) and self-reporting (child) scales. The SEL intervention produced significant gains in the children's relationships with their peers, academic behavior, social skills, emotional knowledge, school learning skills, and school, behavioral, and social adjustment, independent of their previous skill level or gender. The SEL intervention was effective at improving the interpersonal strength of children with previously low skill levels, the intrapersonal and total strength of children of parents with a secondary level of education (groups I and II), and preventing the disruption of school functioning in children with parents with a higher education level (group II).     

The Financial Literacy of Social Work Students

The financial literacy of social work students has become the focus of curriculum development and research, but no study to date has attempted to assess the financial knowledge possessed by social work students. This study addressed that gap by assessing the level of objective financial knowledge reported by social work student respondents (N?=?1,506) to an Internet-based survey. Results indicated that the majority of social work student respondents scored more than 70% correct on a 48-item measure of financial literacy. Multiple regression analysis explained 33.7% of the variance and suggested that the dominant pathway to acquiring objective financial knowledge is through personal experience. Accordingly, financial education programs for social work students may be most appropriate for traditional undergraduates.     

Effects of Parental Divorce on Children's Financial Support for College Students

No-fault divorce laws, and the lowering of the age of minority from 21 to 18 years have combined to have unintended negative impact on the children of divorce. Previous research has shown that children whose parents are divorced are at increased risk for emotional problems and a reduced standard of living. This study was conducted to learn more about the effects of parental divorce on a young person's access to a college education. A questionnaire was developed to learn how students pay for college, and what non-financial support they receive from parents. The questionnaire was administered to a randomly selected sample 9 of 19 students at a state university. Findings indicated that young people whose parents were divorced received higher Pell grants, were more likely to provide more of their own necessities, and were more likely to repay their college loans themselves. Further, young people whose parents were divorced were much more likely to have their material and fnancial needs met by their custodial parents rather than their noncustodial parents. Implications are that young people with divorced parents may have less financial support for college from their family, and the support they receive is much more likely to come from their custodial than noncustodial parent. Changes in child support laws and financial aid policies are recommended.     

Toward Culturally Sensitive Financial Education Interventions with Latinos

ABSTACT

To expand the financial capability of Latinos, culturally sensitive interventions are needed. A literature search was conducted to examine how financial education interventions have been used to improve financial outcomes for Latinos. Just 7 peer-reviewed intervention studies were identified, suggesting a substantial gap in knowledge in this area. Although conclusions about the effectiveness of financial education interventions with Latinos are limited, each study finds positive changes in financial attitudes or behaviors. Using Resnicow’s (1999) cultural sensitivity framework, surface and deep structure methods of tailoring financial education were identified. Implications for designing and testing culturally sensitive financial education interventions are discussed.