Analyzing the Effects of Financial Education on Financial Literacy and Financial Behaviour: A Randomized Field Experiment in Croatia

Abstract In this paper, we examined the financial attitude and financial behavior of students and determined their level of financial literacy through a survey. We found that female students report less interest in finance, have less confidence in their financial abilities, and have a lower financial literacy score than male students. On average, we can conclude that students have a low level of financial literacy. In this study we found factors that influence financial literacy which are age, student’s GPA, whether they already took some form of personal finance course, a proxy for numeracy, and place of birth in terms of a capital city. Furthermore, based on controlled experimental field research, we conducted financial training, and investigated causal evidence of the effectiveness of financial education. A training intervention to increase financial literacy was effective and improved financial attitude but increasing financial literacy through means of education was insufficient for making better financial decisions since students did not report a lower frequency of impulsive buying or a higher hypothetical savings rate. We found no evidence that female students were affected by this training any differently than male students.