Can Financial Literacy Education Reduce the Use of Medicaid and SNAP?

Abstract

In recent decades, we have seen an increase in both the complexity of financial markets and the expectation of individual responsibility with financial decision-making. Policies supporting financial literacy education are promoted as one method toward decreasing reliance on social safety nets. The assumption being that low levels of financial literacy translate to lower economic outcomes and thus an increased probability of dependence on social programs. We use the 2018 National Financial Capabilities Study to examine the relationship between high school mandated financial literacy education and social program participation and find no evidence of a relationship.