Financial Capability Research for Social Change
While a substantial and long body of research about financial education is available (Willis, 2011), the body of knowledge about financial capability is only emerging. In general, these efforts combine financial education with the facilitation of access to the formal financial system through appropriate and relevant products and services. Researched efforts have included educational savings program for youth (Han, Ssewamala, & Wang, 2013; Sherraden, Johnson, Guo, & Elliott, 2011), adults seeking to build assets (such as homes and small businesses) (Grinstein-Weiss et al, 2013), and parents seeking educational assets for their children (Huang, Nam, & Sherraden, 2012). However, further research is needed about the timing of financial capability efforts relative to the lifespan and program duration, and the specific mix of financial capability program elements to maximize effectiveness.
This symposium will provide empirical evidence about specific elements and timing of the elements of financial capability efforts. Specifically, the presentations will focus on important research questions related to the scheduling of program elements within financial capability practice. These three papers discuss financial capability and asset building efforts and draw attention to both the specific choice of program elements, and the timing of elements as instrumental to the outcomes. The first paper by Loke reports findings of a financial capability program for vulnerable youth. Results suggest that a short-term, targeted, and peer-led program that provides financial education and access help the youth to establish good financial practices as they enter adulthood. The second paper by Kim, Huang, Sherraden, and Clancy provide results about the importance of a financial incentive for an early investment in children’s education, and in the investment in shaping parental educational expenses. Their results suggest that financial incentives early in children’s’ lives positively impact parental savings for children’s educational future, and that the savings program raises parental educational expectations for their children. The third paper by Birkenmaier and Curley reports on the long-term impact on credit history and score of a matched savings program. Results indicate that the first year of program participation in a matched savings account program is critical for credit building. Targeted efforts to assist program participants within the first year may be most effective, and efforts to assist participants to maintain credit gains after the first year are also needed. Taken together, these studies provide guidance to financial capability efforts regarding the importance of considering both temporal considerations and other program elements when designing financial capability programming.