Financial Education Programs in Colombia: Challenges in Assessing their Effectiveness
Álvarez-Franco, Pilar B.
Restrepo-Tobón, Diego A.
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Financial education programs enjoy widespread governmental and financial industry support. They are considered an important tool for improving financial literacy, encouraging financial inclusion, and increasing consumer financial protection. Therefore, assessing their effectiveness is important to guarantee that public and private resources are allocated wisely. As we highlight in this paper, the available empirical literature casts serious doubts on the effectiveness of those programs in achieving their main objectives. Even properly designed—from an impact evaluation viewpoint—financial education programs fail to deliver long-run effects on individuals’ financial literacy or financial choices. We highlight the challenges to evaluate the impact of financial education programs and, consequently, their merits. We showcase the international experience in assessing the effectiveness of these programs and draw lessons for Colombia. We offer a set of recommendations regarding the minimum set of attributes that financial education programs should have to allow serious policy evaluation.