Policy brief: the importance of financial education

Promoting the benefits of financial education

Published by: Organisation for Economic Co-operation and Development (OECD) , 2006
Via: Eldis

This Policy Brief looks at the importance of financial education, and how the OECD is helping governments achieve it. The briefing paper suggests that for emerging economies, financially educated consumers can help ensure that the financial sector makes an effective contribution to real economic growth and poverty reduction. However, financial literacy is also crucial for more developed economies, to help ensure consumers save enough to provide an adequate income in retirement while avoiding high levels of debt that might result in bankruptcy and foreclosures.

The briefing paper argues that finding ways to measure whether financial education has achieved its aims, such as through increased consumer awareness or changed behaviour, is not easy and is costly for governments, so not all programmes have been evaluated. But when programmes have been evaluated, they have been found to be effective.

The document concludes that more work is clearly needed to develop ways of measuring the success of financial education programmes, and governments need to invest time and money in evaluating them.