Microsoft Word Ed Horwitz Post Dissertation Fina docx

Participation. Journal of Financial Economics, 101(2), 449-472.  
Yoong, J. (2010). Financial illiteracy and stock market participation: Evidence from the RAND 
American Life Panel (Working Paper No. 2010-29). Retrieved from Pension Research 
Council website: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1707523 
 
 
 

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Chapter 2 - Paper One: The Effectiveness of a Comprehensive 
Financial Education Program in the Workplace 
 Introduction 
Low levels of financial literacy cause many Americans to struggle with basic economic 
concepts needed for proper budgeting, saving, and financial decision making (Lusardi, 2008). 
Having knowledge of basic financial concepts, such as compound interest, the effects of 
inflation, and fundamental risk diversification, decreases the likelihood of making sub-optimal 
financial decisions (Martin, 2007). The subgroups of low income, low education, minorities, and 
women, are at the greatest risk from low levels of financial literacy (Lusardi & Mitchell, 2007a). 
There is a compelling need to identify effective financial education programs that can increase 
financial literacy and positively affect financial decision making (Lusardi, 2008). 
A significant body of research has been dedicated to understanding financial literacy and 
its associations with financial decision making and behavior. The core of this research is based 
upon work assessing financial literacy and improvements associated with financial education. 
The roots of worksite financial education programs can be traced back to the early 1980s, when 
employers began offering programs to help increase financial literacy regarding retirement plans 
and to stimulate contributions to employer 401(k) plans (Bernheim & Garrett, 2003). Since the 
1990s, there has been a rapid expansion of financial education programs, accounting for over 
three-quarters of the programs in existence today (Martin, 2007; Fox, Bartholomae, & Lee, 2005; 
Bernheim & Garrett, 2003). These recently-added financial education programs have been 
primarily offered to employees in the workplace, for both public and private organizations (Fox 
et al., 2005).  

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Financial education programs address knowledge, attitudes, and/or financial behaviors on 
various potential topics and concepts (Fox et al., 2005). Historically, financial education 
programs have been organized into the three primary themes or topics of (a) improving financial 
literacy through personal finance education, (b) educating on retirement savings and investing, 
and (c) addressing home buying, credit, and home ownership (Fox et al., 2005). Despite the fact 
that financial education programs are widespread, the research results on financial education 
have been mixed and are limited in specific areas of interest, such as the workplace environment. 
However, financial education is greatly needed, and there have been many programs and 
approaches which have proven to be effective at increasing financial literacy (Martin, 2007).   
 
Several quasi-experimental research methods, including control groups and pre and post 
testing of participants, will be used to assess the effects and associations related to participation 
in a financial education program. Additionally, a more comprehensive form of financial 
education will be tested, with delivery of the program occurring over a longer period of time than 
typically used in historical literature. To that end, this essay seeks to answer the following 
research questions:    
1.  What is the association between participation in a comprehensive financial 
education program and changes in financial literacy scores? 
2.  What is the association between the number of classes attended in the program 
and changes in financial literacy scores?   
 
Reliable, valid, and relevant research, using properly designed evaluation techniques, is 
greatly needed to provide effective recommendations for the direction of policy (Fox et al., 
2005). The future financial well-being of millions of Americans may rest upon our ability to help 
increase overall financial literacy through effective financial education programs.  

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