Racial Differences in the Returns to Financial Literacy Education

We examine financial literacy and the returns to financial literacy education, specifically focusing on the racial financial literacy gap. We confirm evidence that whites have higher financial literacy scores relative to minorities and that financial literacy increases with participation in financia...

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Bibliographic Details
Published in:The Journal of consumer affairs 2019-07, Vol.53 (2), p.572-599
Main Authors: AL-BAHRANI, ABDULLAH, WEATHERS, JAMIE, PATEL, DARSHAK
Format: Article
Language:English
Subjects:
Education
Financial literacy
Financial planning
Literacy
Lobbying
Minority groups
Participation
Policy making
Racial differences
Wealth
White people
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Summary:We examine financial literacy and the returns to financial literacy education, specifically focusing on the racial financial literacy gap. We confirm evidence that whites have higher financial literacy scores relative to minorities and that financial literacy increases with participation in financial literacy education. However, we find the benefit of participation in financial literacy education is higher for whites than that for minorities. Thus, the impact of being white alone persists, indicating a racial financial literacy and/or behavioral difference despite financial literacy education. Our findings have implications for policymakers interested in narrowing the racial wealth gap via financial literacy education.
ISSN:0022-0078
1745-6606
DOI:10.1111/joca.12205