Evaluating experiential financial capability education: a field study of My Classroom Economy

1. Description of the programme
2. The study
3. What are the outcomes?
4. Key findings
5. Points to consider

Description of the programme

My Classroom Economy (MCE) is a K-12 experiential financial education programme that aims to increase understanding of financial management.

Participants are upper elementary-aged students aged 8 to 11. The programme centres around a classroom economic system. Students apply for classroom jobs and practice budgeting and saving through several core activities including: (1) earning salaries (in the form of classroom currency) for performing assigned tasks; (2) managing expenses, including paying rent for or purchasing their desks; (3) earning bonuses or incurring fines for particular behaviors; and (4) making spending decisions at classroom auctions and stores.

The course takes place in elementary schools in the US. The evaluation took place in the School District of Palm Beach County (SDPBC), the twelfth largest district in the country with a diverse student base across 276 schools.

The study

This study assessed the growth in financial knowledge and behaviour of 1,972 students primarily in grades four and five (ages 8 to 11) in 15 schools in Palm Beach County, Florida: 1,187 students in 69 classrooms, across 15 schools took part in the MCE, alongside a control group of 785 students who did not take part in MCE but were evaluated. 763 parents also took part.

In-class assessments included six main measures of interest:

1. Financial Knowledge
2. Budgeting Behaviour
3. Propensity to Plan
4. Self-Control
5. Financial Socialization
6. Economic Experiences

Students were asked questions on each topic before and after the programme, and the control group of students were asked the same questions. Survey questions included in the pre- and post-assessments were developed based on validated measures presented in prior studies.

The study took place in a context where educators are keen to shift financial education from older students to elementary age students.

What are the outcomes?

• Financial Knowledge
• Budgeting
• Propensity to Plan
• Self-Control
• Financial Socialization
• Economic Experience

Key findings

The study found that the MCE programme produces statistically significant changes in student financial knowledge after only ten weeks. These knowledge gains are notable given that MCE does not employ direct lessons on financial topics, but instead simply exposes students to financial situations. Differences in pre and post assessments also reveal improvements in students’ financial behaviours, including the frequency with which students are engaging in budgeting and money management as well as student reports of discussing financial management at home and outside of school.

Students in schools with MCE also report taking part in more economic experiences, such as using a bank account. Parents of students in MCE schools report that their children’s school is more likely to teach personal finance topics. The size of these effects vary, but all are statistically significant and positive.

There is no clear evidence that MCE helps children to plan for the future, but the effects of the programme appear to positively influence results in social studies, economics, and maths. These findings suggest that experiential financial learning can have positive effects that equal or exceed those of more formal grade school financial literacy efforts.

The authors conclude that MCE and similar approaches show promise as a relatively efficient mechanism to promote financial capability among K–12 students and could serve as an important component of a comprehensive effort to promote financial well-being.

Points to consider

Methodological limitations:

• This study took place in 15 schools in one county which is a small sample size from which to draw general conclusions.
• The study used regression analysis and item response theory to examine the impact of MCE on each of the student outcomes. Other examiners may prefer different methods.

Relevance:

• The study is highly relevant to the study of financial education aimed at elementary school age children, and to the study of financial education more broadly, as this shows that even young children can learn valuable financial management lessons.

Generalisability / transferability:

• Despite taking place in one Florida county it seems likely that these results are transferable due to the robust nature of the study and the use of a control group.

Applicability:

• The study is applicable and could be replicated by others.

Full report

http://gflec.org/wp-content/uploads/2017/04/ODDERS-WHITE-Paper-Cherry-Blossom-2017.pdf?x28148