The impact of financial education for youth in Ghana

Africa

Ghana

Labour Market

Microcredit

J Berry, D Karlan, M Pradhan

2018

Berry, James, Dean Karlan, and Menno Pradhan. “The Impact of Financial Education for Youth in Ghana.” World Development 102 (2018): 71–89.
View publication

Available online at http://poverty-action.org/project/0465.

2018

None

October/2010–July/11 (duration of the full intervention)

Contribute to the sparse evidence that financial education targeted at the youth changes financial behavior, i.e., increase savings.

Students in grades 5 and 7 who were, on average, 13 years old.

Schools were randomly assigned to receive either the full Aflatoun program (which integrates both financial and social education - 45 schools), the Honest Money Box program (only financial education - 45 schools), or a control group (45 schools). Aflatoun is a large, international non-governmental organization (NGO) that has developed school-based curricula for financial literacy training and assists local partners, usually NGOs or ministries of education, to implement these curricula. The program consists in developing character (enhance creativity, knowledge of the environment, knowledge of Ghana), personal understanding and exploration, and rights and responsibilities to children. The Honest Money Box, which was designed by the authors of the study, aimed to explain what money is, notions of savings and spending, the “money box” (depositing and withdrawing), planning and budgeting, and entrepreneurship.

• Savings in schools. Aggregate savings.
• Savings attitudes, home support for savings, risk and time preferences, spending patterns, confidence, and academic performance.
• Child labor as a response to the financial education interventions.

Clustered Randomized Trial

Study design: district officials and implementing partners initially provided a

list of 200 schools, including primary (grades 1–6), junior high (grades 7 and 8), and ‘‘basic” (combined primary and junior secondary) schools. Multiple schools were clustered together within the same compound, then randomly selected only one of those schools joined the pool of potential study schools.
Sample: Primary data consisted of surveys of students in the study schools. We sampled an average of 40 students in each school. Although children of all grades were eligible to participate in the after-school clubs, our surveys targeted children in grades 5 and 7 because these children would presumably have more access to

money and familiarity with finances than their younger peers. In primary and junior high schools, the 40 students were randomly selected from grades 5 and 7, respectively. In basic (combined) schools, 20 students were randomly selected from grade 5, and 20 were selected from grade 7. When schools contained fewer than the target number of students in a given grade, additional students were randomly selected from adjacent grades. The final sample contains 45% from grade 5, 46% from grade 7, and 9% from adjacent grades.
Survey Instrument: baseline and endline surveys. Surveys were conducted in school by enumerators trained by staff of Innovations for Poverty Action (IPA). Participation in the surveys was voluntary, and there were no incentives to participate.

Both programs (Aflatoun and Honest Money Box) had positive impacts on self-reported savings at schools, but there were no statistically significant increases in aggregate savings nor hypothesized mechanisms such as attitudes, references, or knowledge. The financial education-only treatment led to a weakly statistically significant increase in child labor, although the difference in impact between the two treatment groups is not statistically significant.

Child Labour

Households

Local

A financial education curriculum along with a savings box (but no directive or facilitation of using the savings for education expenses) led to higher child labour in Ghana. This was not observed when the same initiative was combined to also teach the children a set of social skills (among them the importance of education in the long run).

Both programs (Aflatoun and Honest Money Box) had positive impacts on self-reported savings at schools, but there were no statistically significant increases in aggregate savings nor hypothesized mechanisms such as attitudes, references, or knowledge.

A limitation of the study is the lack of full student-wise data on participation in the programs, limiting the author’s ability to explore mechanisms of the impacts (or lack of impacts) that is observed.