KEY DETERMINANTS IN BUILDING FINANCIAL CAPABILITY AMONG MIDDLE SCHOOLERS WITH A SCHOOL-BASED FINANCI - KEY DETERMINANTS IN BUILDING FINANCIAL CAPABILITY

KEY DETERMINANTS IN BUILDING FINANCIAL CAPABILITY AMONG MIDDLE SCHOOLERS WITH A SCHOOL-BASED FINANCI

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Unformatted text preview: KEY DETERMINANTS IN BUILDING FINANCIAL CAPABILITY AMONG MIDDLE SCHOOLERS WITH A SCHOOL-BASED FINANCIAL LITERACY EDUCATION PROGRAM A DISSERTATION SUBMITTED TO THE COMMUNITY ECONOMIC DEVELOPMENT PROGRAM OF SOUTHERN NEW HAMPSHIRE UNIVERSITY IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF DOCTOR OF PHILOSOPHY IN COMMUNITY ECONOMIC DEVELOPMENT By Antoinette B. Bolaños Bachelor of Science in Chemistry University of the Philippines Master of Science Pharmacy University of Houston Master in Development Management Asian Institute of Management Master of Arts in Community Economic Development Southern New Hampshire University Chair: Jolan Rivera, Ph.D. Southern New Hampshire University September 2012 Southern New Hampshire University Manchester, New Hampshire Copyright © 2012 Antoinette B Bolaños All Rights Reserved ACKNOWLEDGEMENT I would like the express my gratitude and appreciation to all those who have supported me in all the stages to completing this dissertation. I wish to specially thank my dissertation committee Chair, Dr. Jolan Rivera, who had gone through my two earlier dissertation proposals, only to be abandoned due to changes in circumstances. For this dissertation, Dr. Rivera had inspired and encouraged me to keep focused and work independently towards its completion. His timely and meticulous feedback provided me with clear guidance throughout the dissertation process and its successful finish. I would like to thank Dr. Marilyn Fenton and Dr. Megan Paddack for serving on my dissertation committee and for providing valuable guidance and detailed suggestions to get the qualitative data come to life through the voices of the students and parents in an otherwise technical analysis and findings. Their recommendations made the dissertation more accessible and suitable to school administrators and teachers who have interest in financial literacy education for school children. I am indebted to Mr. Peter Bowler for providing the all-important student surveys and parent feedback. I thank the school district and principal of the middle school for approving the conduct of the study; and the teachers who have been teaching modules of the program and administered those surveys. An agreement to protect the identity of the respondents, the names of the school, the district, and the teachers prevents me from mentioning that detail. I want to express my deep appreciation for the late Dr. Yoel Camayd-Friexas whose design it was to start us in our first semester in the rudiments of research design and methodology. His incisive teaching and research mentoring style made me keener in honing the skills necessary to do the research. As part of my original dissertation committee, he supplied important insights to the research design. He also was instrumental in getting a research grant. My thanks go to Dr. Michael Swack for his valuable advice as one of the original members of my dissertation committee. I am grateful to Dr. Charles Hotchkiss for his support and recommendations to improve the first draft of the dissertation. My sincere appreciation goes to Ms. Patricia O’Donovan for providing edits and suggesting better ways to express ideas in the dissertation. I thank Rose Palis for getting me through the administrative hoops. I thank the sources and administrators of the scholarships that were awarded to me from the former School of CED, the Office of Vice President of Academic Affairs and SNHU Women’s Faculty Scholarship. It is a pleasure to thank my dear friends and family for moral and tangible support. In particular, I thank Veronica Kamerman for her friendship, trust and encouragement since I came to SNHU. At crucial points, I thank for the hospitality of Carmel Kelly, Alicia Medina, Margaret Almeida, Victoring Njankeu and Nicole Varesteh. Many more supported this work and my person with prayers, personal sacrifices, encouragement and professional discussions. I am grateful for my mother, Sylvia for her unflinching optimism, inspiration, prayer and support. Above all, I thank God for orchestrating this opportunity, conditions and networks of people he sent to make me succeed. TABLE OF CONTENTS ABSTRACT .............................................................................................................................................. ix 1 INTRODUCTION .......................................................................................................... 1 1.1 Framing the Problem ................................................................................................................... 3 1.2 The Financial Literacy Education Program of a Middle School in New England ......................... 7 1.3 Purpose of the Research .............................................................................................................. 9 2 LITERATURE REVIEW .................................................................................................10 2.1 The Concept and Definition of Financial Literacy ...................................................................... 10 2.2 Financial Education .................................................................................................................... 16 2.3 Evaluation of Financial Literacy Education Programs ................................................................ 17 2.4 Financial Literacy Education, a Strategy to Instill Asset Accumulation ..................................... 19 3 CONCEPTUAL FRAMEWORK AND RESEARCH QUESTIONS .......................................... 27 3.1 Conceptual Definition of Financial Literacy ............................................................................... 27 3.2 The Dependent Variables .......................................................................................................... 30 3.3 The Independent Variables ....................................................................................................... 31 3.4 The Research Questions ............................................................................................................ 33 4 METHODOLOGY ........................................................................................................36 4.1 Research Design Using Mixed Methods .................................................................................... 36 4.1.1 Outcome Evaluation Using Quantitative Methods ............................................................ 37 4.1.2 Outcome Evaluation Using Qualitative Methods .............................................................. 39 4.1.3 Multivariate Regression ..................................................................................................... 39 4.2 The Financial Literacy Education Program in 2010-2011 .......................................................... 41 4.3 Analyses ..................................................................................................................................... 44 4.3.1 Analysis of the Outcome Assessment................................................................................ 44 4.3.2 Qualitative Analysis ........................................................................................................... 46 4.3.3 Regression Analysis............................................................................................................ 49 5 RESULTS OF THE QUANTITATIVE SURVEY ..................................................................51 5.1 Financial Outcomes ................................................................................................................... 56 5.1.1 Descriptive Statistics of the Financial Outcomes Based on the Outcome Survey ............. 57 Objective financial knowledge .................................................................................... 57 Subjective financial knowledge ................................................................................... 57 Financial attitudes ....................................................................................................... 61 Financial behavior ....................................................................................................... 64 Changes in savings behavior ........................................................................................ 67 5.1.2 Creation of Financial Outcome Scales ............................................................................... 70 5.1.3 Significant Changes in Financial Outcome Scales .............................................................. 77 5.2 Extent of FLEP Participation ...................................................................................................... 5.2.1 Operationalizing FLEP Participation Score ......................................................................... 5.2.2 Extent of FLEP Participation for Each Module ................................................................... 5.2.3 Total Human Capital and Social Capital Input Components by FLEP Grouping ................ 5.2.4 FLEP Grouping Based on Extent of FLEP Participation (FLEP participation score) ............ 80 80 85 90 91 5.3 Changes in Financial Outcome Scores within Each FLEP Group ................................................ 5.3.1 Financial Quiz Score and Changes In Financial Outcome Scales within FLEP Groups ....... 5.3.2 Changes in Financial Behavior Subscales within FLEP Groups .......................................... 5.3.3 Changes in Savings Behavior within FLEP Groups ............................................................. 93 93 96 97 5.4 Intervening Factors .................................................................................................................... 5.4.1 Parental Influence............................................................................................................ 5.4.2 Peer Influence .................................................................................................................. 5.4.3 Had jobs outside the house ............................................................................................. 5.4.4 Students’ Access to Financial Resources (savings, allowance, borrowings, wages)........ 5.4.5 Other Sources of Financial Literacy outside the School .................................................. 99 100 106 111 114 120 6 RESULTS OF QUALITATIVE ANALYSIS ....................................................................... 124 6.1 Students’ Descriptions of their FLEP Outcomes ...................................................................... 124 6.1.1 Student Description of Things Learned from the Math Fair ............................................ 124 6.1.2 Students’ Responses for Changing or Not Changing the Way They Save ....................... 129 6.1.3 Students’ Responses for Changing or Not Changing the Way They Spend ..................... 132 6.2 Parents’ Responses: What They Say Their Child Learned ....................................................... 135 7 FINDINGS ................................................................................................................143 7.1 Correlations between FLEP participation scores and the financial outcomes ........................ 146 7.1.1 Correlation between FLEP participation and changes in financial outcomes ................. 146 7.1.2 Correlation of FLEP score and posttest financial outcome levels ................................... 152 7.2 Comparison of Financial Outcome Measures between FLEP Groups ..................................... 156 7.2.1 Comparison of baseline levels across FLEP groupings ..................................................... 157 Baseline mean differences for financial knowledge between FLEP groups .............. 158 Baseline mean differences for financial attitudes and financial behaviors .............. 158 7.2.2 Comparison of the effect of FLEP exposure on financial outcomes’ posttest scores ..... 161 Comparison of financial quiz scores across FLEP groupings ..................................... 161 Comparative effects of FLEP variants on financial knowledge .................................. 162 Comparative effects of FLEP variants on financial belief .......................................... 168 Comparative effects of FLEP variants on financial self-efficacy and behaviors ........ 171 7.2.3 Components of FLEP Participation Score as Predictors of Financial Knowledge ............ 175 7.3 Effects of FLEP Score, Antecedent Financial Outcomes and Intervening Factors ................... 179 7.3.1 Creation of Regression Models Predicting Each Financial Outcome ............................... 181 Regressions for Objective financial knowledge (Financial Quiz) ............................... 183 Regressions for Subjective Financial Knowledge....................................................... 186 Regressions for Financial Belief ................................................................................. 189 Regressions for Financial Self-efficacy ...................................................................... 192 Antoinette Bolaños (2012, September). Dissertation: K E Y D E T E R M I NA N T S I N B U I L D I N G F I N A N C I A L C A P A B I L I T Y A M O N G M I D D L E S C H O O L E R S W I T H A S C H O O L - B A S E D F I NA N C I A L L I T E RA C Y E D U C A T I ON P R O G R A M ii 7.3.2 7.3.3 8 Regressions for Financial Behaviors .......................................................................... 195 Flow of Impact from FLEP Participation to a Series of Financial Outcomes .................... 198 Effects of Intervening Variables ....................................................................................... 200 Parental influence ..................................................................................................... 200 Peer influence ............................................................................................................ 200 Students’ access to financial resources ..................................................................... 201 Having jobs outside the house .................................................................................. 202 Other sources of financial literacy ............................................................................. 203 DISCUSSION ............................................................................................................204 8.1 General Conclusions ................................................................................................................ 204 8.1.1 Significant Gains in Financial Outcomes and Pathway to Behavioral Change ................. 205 8.1.2 Effects of Intervening Factors on Financial Outcomes .................................................... 213 8.2 Future Research ....................................................................................................................... 219 8.3 Statement of Limitations ......................................................................................................... 222 8.4 Implications ............................................................................................................................. 226 BIBLIOGRAPHY ..............................................................................................................228 APPENDIX: THE STUDENT SURVEY ................................................................................. 238 Antoinette Bolaños (2012, September). Dissertation: K E Y D E T E R M I NA N T S I N B U I L D I N G F I N A N C I A L C A P A B I L I T Y A M O N G M I D D L E S C H O O L E R S W I T H A S C H O O L - B A S E D F I NA N C I A L L I T E RA C Y E D U C A T I ON P R O G R A M iii LIST OF TABLES Table No. Page 3.1 Measures of Human Capital, Financial Capital and Social Capital as Independent Variables.................................................................................................. 32 5.1 Number of Students Who Participated in the FLEP and the Outcome Survey...............55 5.2 Frequency Distribution of Financial Quiz Score............................................................. 57 5.3 Mean, Standard Deviation and Percentage Distribution of Financial Subjective Knowledge Items by Response Option after and before the Financial Literacy Education Program....................................................................................................... 58 5.4 Changes in Financial Knowledge................................................................................... 59 5.5 Mean, Standard Deviation and Percentage Distribution of Financial Belief Items by Response Option After and Before the Financial Literacy Education Program.........61 5.6 Mean, Standard Deviation and Percentage Distribution of Financial Self-Efficacy Items by Response Option After and Before the Financial Literacy Education Program........................................................................................................................ 63 5.7 Changes in Financial Attitude (Beliefs and Self-efficacy)...............................................64 5.8 Mean, Standard Deviation and Percentage Distribution of Financial Behavioral Items by Response Option after and Before the Financial Literacy Education Program........................................................................................................................ 65 5.9 Mean, Standard Deviation and Percentage Distribution of Saving-Spending Ratio by Response Option After and Before the Financial Literacy Education Program.........66 5.10 Mean differences, Standard Deviation for Items Comprising Financial Behaviors........67 5.11 Mean, Standard Deviation and Distribution of Savings Behavior by Response Option After and Before the Financial Literacy Education Program..............................68 5.12 Mean differences, standard deviation for Items Comprising Savings Behaviors by Source of Income...................................................................................................... 70 5.13 Subjective Financial Knowledge Scale for Posttest and Pretest: Item Characteristics and Internal Consistency Reliabilities............................................................................ 72 5.14 Financial Attitudinal Scales for Posttest and Pretest: Item Characteristics and Internal Consistency Reliabilities................................................................................... 73 5.15 Financial Behavior Subscales for Posttest and Pretest: Item Characteristics and Internal Consistency Reliabilities............................................................................ 75 5.16 Financial Behavioral Scale for Posttest and Pretest: Item Characteristics and Internal Consistency Reliabilities................................................................................... 76 Antoinette Bolaños (2012, September). Dissertation: K E Y D E T E R M I NA N T S I N B U I L D I N G F I N A N C I A L C A P A B I L I T Y A M O N G M I D D L E S C H O O L E R S W I T H A S C H O O L - B A S E D F I NA N C I A L L I T E RA C Y E D U C A T I ON P R O G R A M iv 5.17 Percentage of student-reported gains, Mean differences, Standard Deviation, Standard Srror, t-Statistic of Financial Outcomes Scales for Financial Knowledge, Attitudes and Behavior................................................................................................. 78 5.18 The Modules of the Financial Literacy Education Program...........................................81 5.19 The Maximum FLEP Participation Scores Assigned per Module and by Human and Capital Inputs......................................................................................................... 83 5.20 Summary of FLEP Groupings and the Modules Implemented.......................................85 5.21 Components of the Human and Social Capital Inputs for the Career Inves...
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