Financial literacy and education as an asset development strategy: The potential of IDA saving clubs at community action agencies.

摘要

In the past two decades, the financial education movement has rapidly grown into a set of policies and programs that aims to empower individuals and families with financial literacy -- the attitudes, knowledge, and skills necessary to make and act on informed financial decisions. For low- and moderate-income families in the U.S., this development has taken place in the context of increased individual responsibility for financial decisions in the most complex financial system in the world, the explosion of predatory lending, and the emergence of the asset framework for understanding and alleviating poverty.;This dissertation is motivated by the central research question, "How can financial education serve as an effective asset development strategy for poor families?" In the asset development field, financial education is most frequently a core component of Individual Development Account (IDA) programs. The IDA research demonstrates that financial education can work iteratively with a matched savings account to assist poor adults to save for an asset. However, saving is only an intermediate step towards the goals of achieving sustainable homeownership, starting a profitable small business, pursuing higher education, or investing in a retirement accounts. Further, as we have seen with the foreclosure crisis, the acquisition of an asset does not guarantee economic mobility, or even economic stability. Given the range of psychological, sociological, and economic factors that influence financial behaviors; the limited evidence that financial education results in long-term behavior change; and the recent foreclosure crisis that has disproportionately impacted the very communities that IDA programs target; this dissertation asks the following, secondary research questions: (1) What are the potential and limits of financial education as an asset development strategy? and (2) How can financial education be designed and delivered in combination with other programs and policies to maximize its potential while accounting for its limits?;These questions were engaged through a four-year community-based participatory research project based at the Heller School's Institute on Assets and Social Policy (IASP), carried out in collaboration with the Massachusetts Association for Community Action (MASSCAP) and nine of its member Community Action Agencies (CAAs). Theory was utilized from adult and empowering education, the financial capability framework, behavioral economics, and the trans-theoretical model of behavior change to guide the research design, analysis, and interpretation.;This research utilized a mixed-methods design that attempted to account for the interconnections among financial attitudes, knowledge, and behaviors in the context of social and structural factors. The quantitative data consisted of a baseline survey (N=94) and a six-month follow-up survey (n=45) for clients in financial education programs at collaborating CAAs. The qualitative data consisted of interviews with CAA staff and focus groups at IDA programs monthly meetings.;The data demonstrate that the monthly IDA meeting, in various configurations, serves as a saving club that provides sustained, experiential financial education. The saving club facilitates both formal and informal learning, primarily through regular, supportive conversations about money. The saving club format works in synergy with case management and the institutional features of the IDA program to promote the use of four psychological and behavioral saving strategies. The saving club fosters commitment and accountability to oneself and the IDA coordinator, inculcating and reinforcing "taking money seriously". However, coordinators and clients also reported challenges to commitment and accountability to the saving club and, by extension, to the saving strategies it promotes.;Given the challenge of utilizing one-on-one case management to enforce behavioral goals and the potential of the saving club to develop and leverage social support and peer pressure, this dissertation recommends democratizing the saving clubs by shifting more responsibility and ownership of the saving club meetings, and of the financial education process, to clients. This would place greater emphasis on peer learning and accountability, and would have the twin benefits of increasing program effectiveness and scalability. This would also advance the Community Action mission to foster meaningful client participation as a strategy for reducing poverty.;Although financial education programs can promote critical financial knowledge and skills, and the individual responsibility and motivation to apply them, in order to promote sustainable asset development, such programs must be situated within a larger policy agenda that ensures a fair financial system and connects financial education to meaningful opportunities for its participants.