In the last decade, the increased complexity of, and levels of access to, financial products and services, together with rising household debt and the funding of an ageing population, have prompted the State to place increased focus on financial education, with the dual objectives of regulating to enhance market efficiency and mitigating social welfare issues attributed to poor financial decisions. Financial literacy is crucial for young adults as they embark on life events involving major expenditure and debt, particularly for university students who have already accrued a debt based on Higher Education contribution scheme liability and who are making labour market decisions. This paper investigates the determining factors of personal financial literacy levels among a sample of university students at different stages of study and across diverse study areas including business, education, arts, humanities and the sciences; with some interesting findings for policy makers. It also provides indicative evidence of students’ preferred method of learning more about personal finance to facilitate the effective design of personal financial literacy programs.

One of the most important financial decisions that pension participants make concerns how they access their pension assets when they terminate employment with their plan sponsor. Their choices depend both on own preferences and the options offered by their retirement plan. This paper examines both past and future pension withdrawal choices for those with defined benefit (DB) and defined contribution (DC) pensions, separately. Our data are drawn from a set of pension distribution questions we fielded in the Understanding American Study. Results show significant differences in distribution choices based on the type of retirement plan, with individuals covered by DB plans significantly more likely to select annuities compared to similar employees covered by DC plans. We also find differences in how higher annual income affects annuity choices based on coverage by DB plans. Individuals with lower levels of financial literacy and lower annual income have less knowledge of basic pension characteristics.

We examine pension-cost crowd out of salary expenditures in the public sector using a 15-year data panel of state teacher pension plans spanning the Great Recession. While there is no evidence of salary crowd out prior to the Great Recession, there is a shift in the post-recession years such that a 1% (of salaries) increase in the annual required pension contribution corresponds to a decrease in total teacher salary expenditures of 0.24%. The effect operates through changes to the size of the teaching workforce, not changes to teacher wages. An explanation for the effect heterogeneity pre- and post-recession is that public employers are less able to shield the workforce from pension costs during times of fiscal stress. This problem is exacerbated because unlike other benefit costs, such as for health care, pension costs are countercyclical.

Policy discourse surrounding Britain’s unusually well-resourced private schools surrounds their charitable status and their relationship with low social mobility, but informative evidence is scarce. We present estimates of the extent to which private and external benefits at age 25 are associated with attendance at private school in England in the 21st century. We find a weekly wage premium of 17 percent, and a 12 percentage point lower chance of downward social mobility. By contrast, private schooling is not significantly associated with participation in local voluntary groups, unpaid voluntary work, or charitable giving and fundraising; this finding casts doubt on claims that private schools deliver ‘public benefit’ in this way.

This paper builds on previous work (Costrell and McGee, 2017a, Education Finance and Policy) on the redistribution of teacher pension benefits, as measured by the wide variation in individual normal cost rates by age of entry and exit, and the associated cross-subsidies. The further steps taken here are: (i) to examine the impact of the discount rate on the degree of redistribution, and the analytics behind it; and (ii) to identify the distribution of the market value of the pension guarantee. Using the example of the California State Teachers’ Retirement System, I find that: (i) high-assumed returns substantially understate the extent to which costs are redistributed for back-loaded plans; and (ii) the market value of the pension guarantee is highly concentrated among long-term teachers.

As higher education costs rise, many communities have begun to adopt their own financial aid strategy: place-based scholarships for students graduating from the local school district. In this paper, we examine the benefits and costs of the Kalamazoo Promise, one of the more universal and more generous place-based scholarships. Building upon estimates of the program’s heterogeneous effects on degree attainment, scholarship cost data, and projections of future earnings by education, we examine the Promise’s benefit-cost ratios for students differentiated by income, race, and gender. Although the average rate of return of the program is 11%, rates of return vary greatly by group. The Promise has high returns for both low-income and non-low-income groups, for non-Whites, and for women, while benefit assumptions matter more for Whites and men. Our results show that universal scholarships can reach many students and have a high rate of return, particularly for places with a high percentage of African American students. They also highlight the importance of disaggregating benefits and costs by subgroup when performing benefit-cost analysis when the treatment is heterogeneous.

For many people the key question in the referendum is whether a vote to leave will enable the UK to take back control of its borders. So for them the focus is primarily on Article 45 on the Treaty of the Functioning of the European Union (TFEU) which allows free movement of workers. But for individuals much movement to other EU Member States is covered by Article 56 TFEU on the free movement of services. This article will argue that empirical research shows that there is in fact an interesting link between temporary migration under Article 56 TFEU and ultimately permanent migration under Article 45 TFEU. Brexit has the potential profoundly to affect both.

Is financial literacy a substitute or complement for financial advice? We analyze the decision by consumers to seek financial advice in the form of credit counseling. Credit counseling is an important component of the consumer credit sector for consumers facing debt problems. Our analysis accounts for the endogeneity of an individual's financial situation to financial literacy, and the endogeneity of financial literacy to exposure to credit counseling. Results show counseling substitutes for financial literacy. Individuals with better literacy are 60% less likely to use credit counseling. These results suggest that credit counseling provides a safety net for poor financial literacy.

We use data from the Swedish Financial Supervisory 2010 consumer survey to look at levels of financial literacy and retirement planning in the Swedish population. The results indicate that many adults have low financial literacy. In general, financial literacy levels are lower among the young, the old, women and those with low income or low educational attainment. People who report having tried to plan for retirement have higher levels of financial literacy. In particular, an understanding of risk diversification is strongly correlated with planning for retirement. We relate our findings to features of the Swedish pension system.

This study uses a unique data set of retiree characteristics and salary histories for administrators, teachers, and non-professional employees of the Denver Public School Retirement System (DPSRS) to analyze surplus deferred compensation for DPSRS and four state K-12 defined benefit pension plans. We find sizable levels of surplus deferred compensation for each plan, with significant differences across plans, job classes, and age groups. Across plans, differences in cost of living allowances impact the expected present value of retirement benefits more than benefit table differences when controlling for each respective factor. Somewhat surprisingly, the plans in our study with the largest present value of future benefits had lower employee contribution rates. Pension wealth for reduced benefits showed larger wealth accrual at younger ages than full, unreduced benefits, and younger cohorts starting work at an earlier age received significantly higher surplus deferred compensation.

Focusing on education–income anomalies, in which a richer country delivers less education than a poorer country, seems a promising way to harvest a part of the rich history that does not lend itself to econometrics. To test the chain of alleged causation from unequal power and wealth to poor schooling, one must follow the public money, or lack of it, in as many contexts as the data will allow. Public funding for mass schooling is the hitherto untested middle link in the chain. The key to Latin America’s poor schooling was the failure to supply tax money, not gender discrimination or any shortfall in market demand for skills. The most glaring anomalies were the Venezuelan and Argentine failures to supply the levels of tax support for mass schooling that their high income could have afforded.

Do cost considerations justify the current structure of production of extension services in which one or more providers exists in virtually all of the contiguous U.S. states? Provision of extension services has sizable cost implications for the host institutions. Yet, to our knowledge, there has been virtually no analysis of the impact of extension on higher education costs. Using academic year 1995–1996 data, we estimate a multiproduct cost function for 1,445 public institutions of higher education in the United States, including 65 that provide extension services. We find evidence of significant economies of scale with respect to the provision of extension services but no evidence of significant economies of scope between the provision of extension and the production of research, undergraduate education, or graduate education.

The costs of higher education in the UK have shifted increasingly from the state to the student (and students' families). In 1998, a fee contribution of £1,000 per annum was introduced for new entrants to full-time degree courses. This paper examines its effect on debt, term-time employment and student satisfaction. The analysis uses data from a survey of two cohorts of students and identifies how the impact varied with student and course characteristics. Fees led to an increase in student debt (particularly for disabled students and for students who did not receive financial support from their families) and a decline in student satisfaction. No general impact on term-time employment was identified, but term-time employment increased for students who did not receive financial support from their families. Whilst for these two groups inequality was increased, fees appeared to lead to greater equality, in terms of term-time employment, between children of graduate and non-graduate parents. The paper discusses the implications for the introduction of top-up fees in 2006.