Financial Education for Children: What Curriculum? Which Methods? A Cluster Randomized Controlled Trial of Social and Financial Education in Rwanda

Author(s):

Daniel Shephard(presenting / submitting)Yves Valentin Kaneza(presenting)

Conference:

ECER 2015

Network:

WERA Focal Meeting

Format:

Paper

Session Information

WERA SES 02 C, International Lessons Learnt on Student Preparedness and Transition

Paper Session

Time:

2015-09-08

15:15-16:45

Room:

305. [Main]

Chair:

Marcelo Caruso

Contribution

Children and youth are being exposed to more financial decisions, of more complexity, at an increasingly early age. Globally in a study of 164 countries by the World Bank undertaken in 2011, 33% of young people ages 15 to 24 took out a loan, 8% had already accumulated outstanding healthcare loans, and only 34% were saving (Demirguc-Kunt and Klapper, 2012). This challenge is particularly pronounce in Rwanda where only 18% of youth reported saving while over 30% had taken out a loan in the previous 12 months (Ibid). Not only can savings behaviour protect people from financial shocks and help them reach their financial goals, savings has also been associated with better mental health and other wellbeing indicators (Han & Ssewamala 2013).

Financial education is one promising intervention for addressing the challenge of improving the financial capabilities of a population. In particular financial education for children and youth has gained increasing prominence globally as a potential solution by targeting financial knowledge, attitudes, and behaviour at earlier and formative ages (OECD, 2012). Not only is this seen as an important area for intervention internationally, the Government of Rwanda has also identified it as a national priority (Microfinance Opportunities, 2013).

Despite the need for improved financial capability and its importance for later wellbeing, there has been much debate regarding the effectiveness of financial education. However, the

debate has been marked by three key weaknesses: Outcomes are often combined across age groups despite strong theoretical and empirical reasons to expect that age moderates outcomes, non-experimental data has been relied on too heavily with a lack of experimental evidence being assumed, and the definition of financial education has varied widely without sufficient attention to how some variants might be more or less effective. Two recent meta-analyses highlight these challenges (Fernandes, Lynch & Netemeyer, 2014; Miller et al., 2014). A third and key weakness of these studies is also the lack of attention given to the methods that are used to instruct learners on financial topics.

In order to both address the need within Rwanda for improved financial capability while also contributing to the global empirical knowledge concerning the effectiveness of financial education, this paper presents the results of a cluster randomized controlled trial of a pilot social and financial education intervention in Rwanda. The intervention was a local adaptation of the Aflatoun program delivered by a local organization, AMIR. The curriculum has been rigorously evaluated in four other countries with a sixth RCT forthcoming in China.

This evaluation of the program in Rwanda not only examined the effect of the curriculum on key social and financial outcomes, but also evaluated the mediating impact of training teachers on active, participatory learning methods.

Towards these aims the following questions are addressed:

Did the training of teachers affect their ability to use Active Learning Methods?
Did the Aflatoun Social and Financial Education curriculum result in improvements in the following social and financial capabilities of children:
1. Self-efficacy
2. Social skills (pro-social behaviour and conduct disorder)
3. Financial literacy
4. Planning attitudes
5. Savings attitudes
6. Savings behaviour
7. Entrepreneurial attitudes
8. Did improved use of ALMs mediate impacts on other outcomes?
9. Did implementation of SFE impact teachers’ teaching methods through practice in the methods of concern?

The evaluation seeks not only to address if the curriculum affected financial outcomes, but what methods teachers should use to deliver such a curriculum.

The methodology and reasoning relies on the theoretical framework of the Evidence Based Practice paradigm and utilization of representative sampling and randomization to make causal inferences above the average effects of educational programs.

Method

The research used a cluster randomized controlled trial (cRCT). The trial stratified 50 schools by five districts in Rwanda: Nyagatare, Nyanza, Huye, Ruhango and Karongi. All schools identified five teachers to take part in the intervention prior to randomization. The schools were then randomized to treatment and control groups. Seven students were randomly selected from each teacher’s class comprising a total sample of 50 schools, 250 teachers, and 1750 students equally distributed between treatment and control groups. The treatment group teachers were given a training in both Active Learning Methods and Social and Financial Education using trainers from Rwanda’s Teacher Training Colleges. The teachers and schools in the treatment then delivered the Aflatoun program over the course of the academic year with support from AMIR. Data was collected using three instruments: (1) classroom observations of teachers and students using an adapted version of PREQUIP (Hoeksma, 2013), (2) structured interviews with teachers, and (3) structured interviews with students. Data was collected at three points: baseline, midline, and endline. All instruments were field tested and adapted as necessary in Rwanda prior to use and all 10 enumerators were trained prior to data collection. The baseline for the observation was conducted from August to October 2013 prior to teacher training in November while the baseline interviews were conducted at the start of the academic year in February 2014. The midline for all instruments was collected in May and June 2014, while the endline was collected in September 2014. Finally, administrative records of student enrolment status and grades were collected in January 2015.

Expected Outcomes

The results showed the strongly positive impacts of the project on children’s financial skills. The RCT found positive and highly statistically significant changes for children and teachers on eight out of 12 of the key outcomes. Teachers used more active learning methods (three outcomes), students were more engaged, and children were more financially empowered on the following outcomes: 1) financial literacy, (2) planning attitudes, (3) savings attitudes, (4) savings behavior). The effect sizes in this study were larger and more robust than those found in evaluations that were meta-analyzed in the recent systematic review of financial education for children and youth completed by O’Prey and Shephard (2013). The self-reinforcing and complementary relationship between Active Learning Methods (ALMs) and Social and Financial Education was supported by the student data collected in the RCT Students with teachers who encourage a more active learning environment had larger improvements in their attitudinal outcomes regarding savings and planning. Inversely, this investigation supports the role of child-centered Social and Financial Education content in reinforcing teachers learned pedagogical skills. It is likely that this insight could also be applied to other curricular subjects – by redesigning lesson plans around active learning teachers will be better able to make use of the skills they have acquired regarding Active Learning Methods and student-centered learning. The results of this project have important implications for the field. They add further evidence to support the importance and effectiveness of financial education at an early age. It also advances the discourse around how financial education should be delivered. Since financial capability is an applied skill, this study suggests it is more effectively taught using an active, pedagogy. This places additional emphasis on the need to train teachers not only on financial education but on active learning methods that can have other positive educational consequences.

References

Demirguc-Kunt and Klapper. (2012). The World Bank Financial Index. The World Bank: Washington DC. Fernandes, D., Lynch, J.G., & Netemeyer, R.G. (2014). Financial Literacy, Financial Education and Downstream Financial Behaviors. Forthcoming in Management Science. Retrieved from http://ssrn.com/abstract=2333898. Han, C.-K., F. M. Ssewamala, et al. (2013). "Family economic empowerment and mental health among AIDS-affected children living in AIDS-impacted communities: evidence from a randomised evaluation in southwestern Uganda." Journal of epidemiology and community health 67(3): 225-230. Hoeksma, M. (2013). PREQUIP. University of Amsterdam, Edukans. Microfinance Opportunities. (2013). National Financial Education Strategy for Rwanda. Ministry of Finance and Economic Planning, Republic of Rwanda. Miller, M., Reichelstein, J., Salas, C., Zia, B., (2014). Can You Help Someone Become Financially Capable? A Meta-Analysis of the Literature. Policy Research Working Paper. Retrieved from http://go.worldbank.org/ISGZEJ0GY0. OECD. (2012). The High-level Principles on National Strategies for Financial Education. Accessed from www.oecd.org on 31 January 2015.

Author Information

Daniel Shephard (presenting / submitting)

Aflatoun

Programmes and Research

AMSTERDAM

Yves Valentin Kaneza (presenting)

Rwanda Education Research Centre

Research

Kigali

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