Improving Financial Literacy in Secondary School Students: An Randomized Experiment

Financial literacy is a multicomponent construct comprising financial knowledge, attitude, behaviors, and well-being. Financial literacy in young people helps them to achieve financial independence and escape from intergenerational poverty. Recent assessments, however, reveal that youth financial literacy is unsatisfactory. Financial education should be provided for students during secondary school as a natural context in which to establish young people’s financial literacy. Empirical evidence from randomized experiments studying the impact of financial education on secondary school students, however, is limited. To address this research gap, we performed a randomized experiment with 270 Form-3 (U.S. equivalent Grade 9) secondary school students in Hong Kong. Structural equation modeling (SEM) results demonstrated that objective financial knowledge, financial attitudinal variables, and financial well-being variables could converge into the latent construct of financial literacy, while all financial behavioral variables converged into another latent construct of financial behavior; of note, the two latent constructs were not significantly correlated. SEM results also revealed that our financial education program significantly improved financial literacy, but did not have a significant effect on financial behavior in the short term. These findings contribute to existing financial literacy research by facilitating more accurate measurement and detailing the near-term effects of financial interventions at the adolescent stage in young people.