Microsoft Word Ed Horwitz Post Dissertation Fina docx

 Literature on Financial Education 
To better understand where and how financial education programs have been associated 
with increased levels of financial literacy, a review of the representative research is presented. 
There are several historical research articles that provide definitions and frameworks to help 
guide this research.  
 
The definitional framework for categorizing different types of educational programs has 
yet to be established as uniform, with historical research sharing similar yet different components 
(Huston, 2010; Remund, 2010).  Financial education has focused on the personal finance topics 
of (a) basics, (b) borrowing activity, (c) savings and investing related areas, and (d) insurance 
risk management (Huston, 2010). In a workplace setting, financial education varied among 
employers and could generally be categorized into the three primary dimensions of content, 

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media, and frequency (Bernheim & Garrett, 2003). Financial education has also been similarly 
classified by setting, audience, and subject (Todd, 2002; Braunstein & Welch, 2002). Content or 
subject topics related to savings include (a) retirement income sources and needs, (b) the 
establishment of goals, (c) pension participation, (d) retirement income planning, (e) time value 
of money concepts, (f) budgeting, and (g) debt reduction. Content topics related to asset 
allocation include (a) concepts of risk, (b) risk tolerance, (c) diversification, and (d) asset 
characteristics. The media classifications tended to be mostly face-to-face education in a 
workplace setting, but also included online and printed educational materials as supplemental. 
Frequency can range from single event content delivery workshops to scheduled intervals (e.g., 
quarterly) or even a series of classes.   
Sources of survey data on household finance (i.e., Survey of Income and Program 
Participation, the Panel Study on Income Dynamics, and the Survey of Consumer Finances) 
contain nothing specific to employer-based financial education delivery (Bernheim & Garrett, 
2003). The lack of specific workplace research limits the available information on financial 
education to a handful of relevant studies.  
Bernheim and Garrett (1996) looked at how the financial education was valued by the 
employees. It was found that employer financial education was regarded among employees as 
the primary source of authority on financial advice and retirement planning. However, results 
were based on the assumption that the financial education was remedial in nature. The 
importance and value of employer-based financial education, as perceived by employees, is a 
key finding from this research. Bernheim and Garrett (2003) also investigated the effects of 
employer-based financial education on both retirement and personal savings. Bernheim started 
gathering and monitoring adequacy of personal savings rates using an annual household survey. 

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In 1994, the survey was expanded to include questions related to employer-based financial 
education programs. Data was collected on a national sample of respondents between the ages of 
30 and 48, with a total of 2,055 surveys completed. Their research found that employer-based 
financial education significantly stimulated retirement savings among low and moderate savers 
(Bernheim & Garrett, 2003). Among respondents, 27% indicated that their employer was the 
most important source of advice and information on retirement planning, versus only 7.4% 
where employer-based financial education was not offered.  
 
Prior research has also provided insight as to the potential benefits of workplace financial 
education programs and their ability to improve overall employee financial well-being. It was 
noted than an employer’s best workers are typically people who are in control of their personal 
finances and contribute to their pension plans (Wissert, 1998). Employee financial education 
participants were shown to have higher levels of perceived financial well-being, and the effects 
were also visible in their work (Wissert, 1998). Workers with poor financial well-being were 
absent from work more frequently, received poor performance ratings, spent excessive time at 
work dealing with financial problems, and experienced a decline in job productivity (Joo, 1998). 
Employers might reduce employee absenteeism and improve organizational commitment by 
helping employees reduce financial stress through effective workplace financial education 
programs (Kim & Garman, 2003).