Against Financial Literacy Education
Author: E. Lauren Willis
Topic: Financial literacy
Publisher: University of Pennsylvania
Location: United States
Format: Article
Content Type: Research
Publication Date: November 30, 2008

This paper argues that the pursuit of financial literacy poses costs that almost certainly swamp any benefits. For some consumers, financial education appears to increase confidence without improving ability, leading to worse decisions. When consumers find themselves in dismal financial straits, the regulation-through-education model blames them for their plight, shaming them and deflecting calls for effective market regulation. Consumers generally do not serve as their own doctors and lawyers and for reasons of efficient division of labor alone, generally should not serve as their own financial experts. The search for effective financial-literacy education should be replaced by a search for policies more conducive to good consumer financial outcomes.

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