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MIRIAM BRUHN
LUCIANA DE SOUZA LEAOARIANNA LEGOVINI
ROGELIO MARCHETTIBILAL ZIA
WORLD BANK
Financial Education and Behavior Formation:
Large Scale Experimental Evidence from Brazil
Moscow, May 2013
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Agenda
BackgroundCharacteristicsKey success factorsImpact Evaluation methodologyResultsConclusionNext steps
Background (1)
Brazil’s financial literacy status was grim
A survey had found that 82% of Brazilian consumers were unaware of the
interest rate when borrowing money, overdue installments were mostly caused by poor
financial management, 87% of families did not save for the future, 40% did not make any sort of investments with
excess income. The government decided to tackle the
subject at different levels, one of them was at high school
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Background (2)
Why high school students Experience showed changing adult behavior
is hard with limited success stories.Students are prone to learning and
incorporating new attitudesStudents could be exposed to financial
literacy material for longer time periods. With clever design students could become the
agent of change at home.
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Background (3)
In 2007, to develop the program the government created a working group (Grupo de Apoio Pedagógico - GAP) to interact with different stakeholders, lead a pilot implementation and subsequently role out the program.
GAP included representatives from Government financial regulators / supervisors and Financial trade associations (private sector), a broad base of stakeholders.
The goal was to develop a financial education curriculum that would reach all Brazilian public high schools.
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Characteristics (1)
The Teaching Material:developed three books to be used in three
consecutive school semesters / years;created to inform and guide young people
developing an independent and sound financial behavior;
assembled teaching situations aligned to the reality of the student and granted autonomy for the teachers on how to present the material;
to be used within any subject in the school (math, geography, science, etc.): cross-curricular approach
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Characteristics (2)
Book 1 - Short-term situations related to the student’s everyday family, social life, and personal property, for example keeping track of expenses
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Characteristics (3)
Book 2 - Medium term situations: work, entrepreneurship, large projects, for example Which career do I want to follow?
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Characteristics (4)
Book 3 - Social Context, the country’s economy; What is corruption? Do I want more than minimum salary?
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Characteristics (5)
Teacher’s training and involvement Key: convince teachers of financial education’s
importance ; “win their hearts and minds”; Training workshops in each of the 6 states
supplemented by virtual training (DVDs distributed to facilitate replication);
Teacher guidebook provided instructions on how to use the material and assessment methods, as well as examples of how to integrate the financial education in the curriculum.
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Key success factors (1)
Presentation approach, many educations programs fail to make financial knowledge tangibleHow did the project address this problem?
Quality: material developed by top education experts in Brazil and rigorously tested
Use: training and materials provided to all teachers Incentives: opportunity for teachers to meet leaders in
the financial and international institutions, and awards to best performing schools
Result: rethink high school education Fun, relevant, interactive, proactive
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Key success factors (2)
Not just knowledge but change behavior and attitudes
How did the project address this problem? interactive material with practical exercises relevant to young people’s lives actionable information cutting across all relevant spheres of life reinforce intervention
getting the family involved teaching financial literacy to parents
Result: the material motivated student try out the new behavior and helped them put it into practice
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Key success factors (3)
Incorporate the student’s environment & household
How was this addressed? Teachers were guided for constant parent interaction
through homework assignments and exercises Parental workshop
Result: the workshop reinforced changes in student behavior and improved parental behavior
Impact Evaluation methodology (1)14
Lead by the World Bank in coordination with stakeholders in all the stages of the pilot project;
The study spanned three academic semesters, from August 2010 to December 2011,
Data collected in three rounds baseline (August 2010), follow-up 1 (December 2010), and follow-up 2 (December 2011);
Impact evaluation team participated in all teacher’s training, workshops and monitoring events throughout the pilot.
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Impact Evaluation methodology (2)
Evaluation done in all of the 868 schools participating in the program (in 6 states in Brazil, covering 26 thousand students.
Schools that were interested in participating in the pilot were randomly assigned to Treatment group receives financial education text books for
free AND receives teacher training for how to implement the material
Control group will receive the same two school years later
Half of the parents in treatment schools were also randomly assigned to parent financial education workshop in schools
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Results
All measured effects arestatistically significant
in most cases at the 1 percent level--the likelihood that the differences in outcomes are not cause by the program is less than 1 percent
economically significant They compare favorably to other financial literacy
programs They compare favorably to other education programs If the effects held at national level, they could have
macroeconomic effects
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Results: Knowledge
More knowledgeDistribution shift
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Results: Knowledge;Positive Impact on Financial Proficiency
Follow-up 1 Follow-up 245
47
49
51
53
55
57
59
61
63
65
56
5960
62
ControlTreatment
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Results: Knowledge; Distribution Shift
25%
45%30% 32%
46%
22%
control treatment
<50 51-70 >70 <50 51-70 >70
28% more treated students do very well 26% fewer treated students do very poorly
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Results: Behavior
More saversMore savings (1.4 percentage point increase)More careful spending
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Results: Behavior;Percentage of Students who Save
Follow-up 1 Follow-up 20
10
20
30
40
50
60
70
80
90
100
4440
49 46 ControlTreatment
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Results: Behavior;Percentage of Income Saved
Follow-up 1 Follow-up 20
10
20
30
40
50
60
70
80
90
100
12.9 14.3
ControlTreatment
Question Not Asked in FU 1
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Results: Behavior;Students’ Spending Behavior
More treated students make a list of expenses every month
More treated students negotiate the price and/or payment method
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Results: Behavior;Percentage of Student who Make a List of
Expenses
Follow-up 1 Follow-up 20
5
10
15
20
25
30
35
40
45
50
13 1416 17
ControlTreatment
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Results: Behavior; Percentage of Students who Negotiate Prices and/or Payment Methods
Follow-up 1 Follow-up 20
10
20
30
40
50
60
70
80
90
100
74 7478 77
ControlTreatment
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Results: Attitudes towards future behavior
More financial autonomyGreater intention to save
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Results:Financial Autonomy Index
Follow-up 1 Follow-up 246
48
50
52
54
49
5151
52
ControlTreatment
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ResultsIntention to Save Index
Follow-up 1 Follow-up 247
48
49
50
51
52
53
54
49
5151
53
ControlTreatment
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Results:Spill-over Effects of School Program on Parents
Students’ financial education material includes exercises to be completed with parents (e.g. make a household budget)
Positive impacts on parental financial knowledge and behavior increase in parental financial knowledge increase in discussing financial matters with their
children increase in making a household budget
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Conclusion
Pedagogical material It was adherent to the educational system Appealing for students and teachers Catalyzing effect of different subjects in the schools
Appreciation of teachers as a mediator of the learning process – 2.000 teachers trained for the pilot Training of trainers Training of teachers Distance Education for teachers and trainers
Evaluation as a strategy for scalability Results to assure the quality in dissemination Impact for referral to the educational and financial segments
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Next StepsActions
The Ministry of Education is now scaling up the program to 5,000 Brazilian high schools
Financial education programs for primary schools
Virtual platform for national dissemination
Development of guidance to disseminate in public and private schools
Educational community of practice for the engagement and exchange of experiences between teachers
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Thank you!
Rogelio Marchetti: [email protected] de Souza Leão: [email protected]
More information about the Brazilian Financial Education Program: Silvia Morais
