Experiential Financial Literacy: A Field Study of My Classroom Economy J. Michael Collins

Financial Education in Schools 2013 study of 5-lesson course in elementary schools  Found gains in quiz scores and behavior...but: ….Teachers not well prepared for content ….Competing demands on time Simulation or experiential approach may be easier to integrate into schools… ….But are in-class simulations as useful as formal courses?

Classroom management tool Materials are free (myclassroomeconomy.org). Experiential Focus on behaviors Minimal teacher training Customizable

Earn currency for performing jobs Manage expenses Earn bonuses Pay fines Spend on auctions

Job Tasks Salary Banker Keep records of balances and payments 700 Police officer Record and collect fines 650 Loan Officer Manage loans for banker 550 Custodian Classroom cleaning 500

Evaluation Palm Beach County, Florida in 2015-16 2,000 students in 4th- 5th grades 115 classrooms in 24 schools Schools randomly assigned

Parent non-English Speaker 32% Number of Students 1,972 Age 9.3 % White (non-Latino) 41% Parent non-English Speaker 32% Number of Students 1,972

Average student had an account balance of $1,295 Student Engagement Average student had an account balance of $1,295 About one in three students (32%) bought their desks, instead of paying weekly rent 60% of students reported buying at least 1item 3 out of 4 reported paying a fine 95% received bonuses

Outcomes: Changes After 10 weeks Financial knowledge [13-item quiz] Budgeting behavior [5-item scale] Financial socialization [2-item scale] Economic experiences [5-item scale] Also Administrative data on student grades

Financial Knowledge Measures Sample questions (all multiple choice or True-False) Q1. A plan for spending money is called a ______. Q2. Jill had $50 in her checking account. She made a withdrawal of $10 and a deposit of $20. What is Jill’s balance in her checking account? Note: MCE does not “teach” financial topics, only experiences.

Effects Compared to Comparison Students

~More questions on quiz correctly answered Average IMPACTS ~More questions on quiz correctly answered ~10% improvement in budgeting behavior ~15% more likely to engage in money management outside of school. ~20% more likely to talk about money at home Parents also reported more financial education activities at school and home

School Administrative Data Percent of Standards Passed Social Studies Standards Passed / 16 (mean=49%) Economics Standards Passed / 2 (mean=34%) Math Standards Passed / 12 (mean=64%)

Teachers reported high satisfaction: 95% will use again Key to Success Teachers reported high satisfaction: 95% will use again Classroom management system first, financial education program, second. Teachers with no experience teaching financial content were successful with three hours of formal training.

Prior Study: Traditional Education Program Financial Fitness for Life: fffl.councilforeconed.org Batty, Collins, & Odders-White, 2015. Experimental evidence on the effects of financial education on elementary school students' knowledge, behavior, and attitudes. Journal of Consumer Affairs, 49(1), pp.69-96.

Comparing APPROACHES

DiscussioN Impacts: Effect size of close to 0.20 Mode: Pedagogical value similar to traditional method. Implementation: Operates as a classroom management system Bigger Effects: Could be operated concurrently with other curriculum or programs. Longer Run: State mandated financial education and the credit behavior of young adults - fewer defaults; higher credit scores (Brown, Collins, Schmeiser & Urban, 2016. )

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Center for Financial Security J. Michael Collins Center for Financial Security jmcollins @ wisc.edu 608.616.0369 cfs.wisc.edu Twitter: @jmcollinswisc