Exploring the Relationship between Financial Education and Financial Knowledge and Efficacy: Evidence from the Canadian Financial Capability Survey

Researchers and policymakers in many countries are interested in better understanding the relationship between financial education participation and cognitive outcomes such as financial knowledge and self-efficacy. We used two waves of the nationally representative Canadian Financial Capability Survey along with propensity score matching (PSM) to compare outcomes between persons who had taken a financial education course to those who had not. After matching and adjusting for demographic and economic factors, financial education participants exhibited significantly higher objective and subjective financial knowledge and financial self-efficacy scores. Post-estimation analysis showed that higher overall objective financial knowledge scores were at least partially driven by higher scores of men. Financial education participants had higher subjective knowledge and financial self-efficacy scores for both genders and across age. Future research into financial education ought to consider cognitive dimensions in addition to behavioral and financial outcomes.