To boost global financial resilience, why not start in the classroom?

Consumers around the world are increasingly ill-prepared to navigate highly complex financial systems and mounting market risks. While more than 70 countries are actively implementing or designing national financial education strategies in response, according to the Organisation for Economic Co-operation and Development (OECD), skepticism remains regarding the true return on investment of these programmes.

Students may learn financial concepts in school, but by the time they become adults and enter the financial system, could that knowledge have faded?

Recent evidence counters this skepticism, however. In a landmark study, I tracked 60,000 students in Peru from 2016 to 2023 and found that school-based financial education is not only effective in the short term. It also fundamentally reshapes long-term adult financial behaviour and creates powerful ripple effects throughout communities.

The financial education delivery model is critical to generating meaningful learning gains. And, as my research shows, when it’s targeted at young people, financial education significantly boosts knowledge. The study also reveals some other key findings about how to deliver financial education effectively.

First of all, mandatory integration works best. When financial education is built directly into the regular school day, its impact on student learning is nearly four times greater than when offered as an optional after-school programme.

Also, teaching personal finance does not force an academic trade-off. When students receive financial education, there are no negative effects on their overall grade progression, maths scores or university aspirations.

As documented in another study I conducted, the immediate effects of school-based financial education are deeply inclusive. The short-term learning gains apply across genders, socioeconomic status and baseline performance levels. These programmes do not widen initial classroom inequalities or leave lower-performing students behind when it comes to absorbing financial concepts.

But the ultimate test of financial education is whether it changes adult behaviour.

By linking the high school data to administrative credit bureau records covering the seven years through 2023, my research shows that early financial lessons can build lasting resilience. Instead of merely memorizing formulas, students can learn how to navigate financial information. This empowers them when they face real-world financial decisions later in life.

This long-term evidence highlights several systemic behavioural shifts as a result of financial education:

My research also reveals that while knowledge gains are uniform and equitable at the classroom level, these gains do not necessarily translate into behavioural changes in the long run.

Over the seven years I tracked the former students as adults, the positive changes in credit behaviour and access were highly concentrated among students with higher baseline academic performance.

While the financial education provided to these students built a baseline level of understanding for everyone, the highest-achieving students turned this education into clear, long-term downstream financial and credit advantages as adults.

Another compelling argument for school-based financial education is that it generates spillover benefits for both parents and teachers.

My research shows that school-based financial education led teachers to significantly increase their financial literacy more than their students, translating into an 8.7 percentage point increase in their probability of saving. Teachers also saw an average increase of over $500 in their personal savings balances at the end of the financial education programme.

Knowledge can also flow upward from children to parents, providing a "backdoor" for financial education to travel throughout the economic pyramid. When students from low-socioeconomic status households participated in the programme, the probability of a parent defaulting fell by 26%, and their credit score increased by 5%, compared to the control group.

This intergenerational spillover was particularly potent in households with female students, which saw a 28% reduction in parents' past-due credit.

Scaling this school-based programme would cost $4.80 per student. And by tracking these students into adulthood over a 10-year horizon, the research shows that this investment can generate $21.24 per participant in direct financial benefits.

This means that every single dollar invested in the programme returns more than four dollars in economic value to society. Furthermore, the programme pays for itself quickly, reaching its break-even point within just 1.75 years after young adults actively enter and participate in the formal credit market.

Crucially, these economic indicators are only the lower boundary of the programme's true return on investment. If the analysis were to quantify and add the substantial economic gains detailed earlier – namely the thousands of dollars in increased personal savings across the teaching workforce and the 26% drop in loan defaults among parents – the true benefit-cost ratio and net present value would be exponentially higher.

School-based financial education is a low-cost intervention that can trigger significant behavioural changes for the rest of students’ lives. It can also be a highly efficient, self-funding mechanism for long-term macroeconomic stability.