# **1. Introduction**

At least 64 countries around the world are implementing or planning national strategies for financial education (OECD 2015). Many of these strategies involve teaching financial education in schools. Proponents of this approach argue that school financial education guarantees broad coverage and reaches individuals at a stage in life where they are particularly receptive to learning and forming behavioral patterns (e.g., Bruhn et al. 2014; Lusardi et al. 2010; Frisancho 2021; Lührmann et al. 2018). On the other hand, opponents claim that “requiring schools to spend time and money teaching financial literacy is a worse financial decision than any that those highschoolers are likely to make anytime soon,” pointing out that effects on financial behavior seem to be small and are uncertain in the long run (Ogden 2019).

While the literature on the impact of financial education in schools has expanded in recent years, we still know very little about the effects of these programs on long-term financial behavior. A meta-analysis of 37 studies measuring the effect of school financial education programs for children and youth recently concluded that the programs have strong effects on financial knowledge, and weaker but still statistically significant effects on financial behavior (Kaiser and Menkoff 2020). However, most studies measure only short-term effects of financial education, less than a year following the intervention. In fact, the meta-analysis suggests that the effects of school financial education decline over time (in a timeframe of up to 80 weeks), which may be because people forget what they were taught (see also Fernandes et al. 2014).<sup>1</sup> Another literature review likewise concludes that financial education for students has “a positive effect on short-term financial knowledge and awareness of the young, but there is no proven evidence on long-term behavior” (Entorf and Hou 2018).

This paper addresses this evidence gap by studying the long-term effects of a comprehensive highschool financial education program in Brazil. The program was implemented during a 17-month period across the 2010 and 2011 academic years. Bruhn et al. (2016) measured the short-term effects of the program in a randomized controlled trial, spanning 892 public high schools in six Brazilian states and approximately 25,000 students, with a baseline and two follow-up surveys conducted in 2010 and 2011. Half the schools were randomly selected to receive teacher training and financial education textbooks, which they integrated into the existing curriculum during the two last years of high school, i.e., the second and third years. Control group schools did not receive training or materials but participated in the surveys. Students in the randomized controlled trial graduated from high school at the end of the program and the control group was never exposed to the financial education program.

The short-term effects measured in Bruhn et al. (2016) show increased financial knowledge, as well as positive effects on savings attitudes, self-reported saving for purchases, money management, and budgeting. By contrast, the program also led to significantly greater use of expensive financial products such as credit cards, and a higher likelihood of being behind on credit repayments, likely because the program tried to inform students about these products but did not

> 1 An exception is Frisancho (2021), who examines credit bureau data for up to three years after a financial literacy intervention started in Peruvian high schools (corresponding to one to two years after the students graduated). The intervention led to less borrowing for students in some subgroups.

2