When children receive financial education at school, the benefits extend not only to their families but also to the local community and the broader economy.‍‍‍‍

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Veronica Frisancho

Chief Economist at the Latin American Development Bank

• Many adults are unable to participate in financial education programs due to limitations in time or resources.

• However, research shows that financial education programs children receive at school can benefit family finances.

• These benefits aren’t limited to households—they can also extend to strengthening the financial health of local communities, and even have a positive impact on the broader economy.

Financial literacy is a critical skill that not only shapes individuals' financial well-being but also plays a vital role in fostering broader economic stability and participation—especially in today’s global economic landscape. Yet, delivering financial education to vulnerable adult populations can be particularly challenging, often hindered by logistical barriers such as budget constraints and competing priorities among adults themselves.

However, research shows that financial education programs in schools not only empower students but also positively impact parents. This approach doesn’t just enhance families’ financial literacy—it also fosters broader economic empowerment across society.

A Study on the Effects of Financial Education

In 2023, I published a study examining the effectiveness of a school-based financial education program. Launched in 2016, the program targeted ninth- and eleventh-grade students across six urban areas in Peru. It integrated financial literacy lessons into regular classroom instruction and was supplemented with specially designed workbooks covering essential topics such as budgeting, financial products, and responsible consumption.

Teachers received comprehensive training and access to resources, enabling them to deliver the curriculum effectively—tailored to each grade level—in 16 to 32 hours. The schools were carefully selected and randomly assigned either to participate in the program or serve as a control group.

The results show that this financial education program significantly improved students' financial literacy. Compared to the control group, the experimental group demonstrated a notable increase in their final exam scores on financial knowledge. Additionally, implementing the financial education initiative also led to a significant boost in students' financial independence and money-management skills.

So, what about the intergenerational spillover effect? The study reveals an unexpected ripple effect, showing that the impact of financial literacy education extends even to students' parents. By surveying more than 20,000 students and analyzing the credit histories of over 10,000 parents, the research demonstrates that students can act as valuable conduits for financial knowledge—particularly benefiting families with lower incomes.

The benefits of financial education

My research shows that school-based financial education programs typically have a moderate impact on parents' financial behaviors, but for low-income families, children exert a significant spillover effect on their parents' financial practices.

In fact, although the participants' families were not the direct target of the program, four notable outcomes were still observed within the participants' households:

1. Loan default risk declines

Parents are 26% less likely to fall behind on loans or other bills. This suggests that children receiving financial education may indirectly enhance their money-management skills.

2. Improved credit score

Participants’ parents saw an average credit score improvement of 5%. This suggests that, after their children participated in financial education programs, parents began adopting more responsible and informed financial behaviors.

3. Rising debt levels—but with greater responsibility

Data shows that parents' current debt levels have risen by 40%. While this increase may seem counterintuitive, it actually reflects an improvement in access to credit—a critical foundation for economic mobility—and demonstrates that, when managed wisely, such access can be beneficial.

4. The daughters show higher engagement

Families with daughters participating in the program experienced unique benefits, such as a 6.7% improvement in credit scores and a 28% reduction in loan delinquency rates. This highlights that financial education has gender-specific impacts on households. It also suggests that, in many families, daughters may have a stronger voice when it comes to financial matters—perhaps playing a more significant role in their family’s financial decision-making than their sons do.

The Ripple Effects of Financial Education

These findings challenge traditional assumptions about financial education, which typically focus on parents passing knowledge down to their children. Instead, this study from Peru reveals that once children acquire financial literacy, they may inadvertently—and effectively—become educators for their own parents. This, in turn, could foster a positive shift in families’ attitudes toward money management.

The evidence gathered in this study provides policymakers with valuable insights. These findings highlight the ripple effects of financial literacy, which extend far beyond the classroom setting. As a result, integrating financial education into school curricula could prove to be a viable and cost-effective strategy for fostering widespread economic empowerment.

In regions with low adult financial education participation, this strategy could yield significant economic benefits. By bypassing common barriers to adult learning—such as time constraints and limited resources—it enables financial knowledge to be disseminated more efficiently within communities.

It also aligns with global goals such as the United Nations Sustainable Development Goals (SDGs), aiming to enhance economic inclusivity and demonstrating that financial education offered in schools can serve as a strategic and impactful investment for the broader economy.

Against the backdrop of global challenges in financial complexity and uncertainty, integrating financial education into school curricula can equip the next generation with the tools needed to achieve financial empowerment. This approach ensures that economic growth and stability benefit all levels of society—ranging from classrooms and households to communities and beyond.

The above content represents the author's personal views only.This article is translated from the World Economic Forum's Agenda blog; the Chinese version is for reference purposes only.Feel free to share this in your WeChat Moments; please leave a comment at the end of the article or on our official account if you’d like to republish.