June 13, 2014
Recent Financial Education Insights & Resources
By Cindy Ivanac-Lillig
The Council on Economic Education (CEE) just issued the results of their 2014 Survey of the States. This survey collects data on state-based K-12 financial literacy mandates and testing requirements. It is very interesting to see how the states compare to one another. However, even with this information, it remains very difficult to know if we are producing the desired outcomes. In other words, it is not clear what cocktail of mandates and tests, if any, will result in the behavior and attitude changes that our students need to effectively handle their future financial lives.
There was a promising finding in a recent U.S. Treasury-sponsored research project on young children and bank branches in schools. Check it out here. One of the most robust findings was regarding the attitude change among students. The student group that was exposed to the bank branch in school showed a marked improvement in their thoughts/attitudes towards how easy it was to save in a bank. This may seem simplistic, but in the long run, this minor change in attitude change could prove significant.
Increasing our students' financial capabilities is hard work and not simply a function of knowledge transfer -- which makes it an especially hard nut to crack in the modern test-filled classroom. The Treasury and its councils have done some great holistic work discussing the different facets of financial capability as opposed to just financial literacy that include choice architecture and consumer protection. It is not totally clear what the formula is for our students, and frankly for all of us, to become more financially capable, but there is interesting work underway. Here are a few additional resources to check out if you are interested in some of the academic work that is going on:
U.S. Treasury Financial Capability Research Presentation (2014)
Chicago Fed Economist discussing her research on the importance of math education
Harvard Business School: High School Curriculum and Financial Outcomes... (2014)
Chicago Fed's Financial Literacy and The Effectiveness of Financial Education and Counseling: A Review of the Literature
For folks who live in the Chicago area or are simply interested in getting involved, IL Jump$tart is holding its inaugural Action Network for Financial Empowerment (ANFE) meeting at the Chicago Fed on July 25th. Check out their website for details.Posted by Cindy at 7:31 PM | Comments (0) | TrackBack (0)
April 8, 2014
Reflecting on Equal Pay Day
By Cindy Ivanac-Lillig
President Kennedy signed Equal Pay Day into law in 1963. It marks the date when the average woman has worked enough days to earn what the average man earned in the previous year. An American woman, on average, had to work all of 2013 plus January thru April 8, 2014 to earn what an average man earned in 2013.
The Department of Labor (DOL) and the Bureau of Labor Statistics (BLS) have some interesting resources on the topic. According to the BLS, women earned 81 percent of the (median) wages of their male counterparts in full-time wage and salary positions. When the data was first collected, 35 years ago, women earned 62 percent of the wages of their male counterparts. While there has clearly been progress, the last decade has seen this ratio stagnate between 80 to 82 percent. The level of education, age and ethnicity seem to matter a fair amount based on the BLS data. Overall, it is safe to say that the disparity is very noticeable for women over 35 years of age and married.
BLS also has an interesting breakdown by states; however they warn that comparing state data is very difficult as there can be significant differences in occupations and industries. With this caveat, check out the state section of the report Chicago District (Midwest) report.
Let me know what you think.
If you are a teacher, let me know if this is something that you think can be leveraged to teach more about labor economics in your classroom.
February 13, 2014
Economics & Valentine’s Day
By Cindy Ivanac-Lillig
One of this blog’s objectives is to bring the most un-economic subjects into the realm of economics. My hope is that this will entice folks to further study the “dismal” science. Today, Valentine’s Day is my target!
The economic implications of who we date and marry seem pretty obvious on a micro level. If you fall in love with someone that earns a lot of money, it is clear that your joint economic situation will probably be comfortable and vice-versa. By the way, I am in no way advocating one situation over the other.
However, it also seems that there are macro-economic implications to these decisions as well. Joanne Weiner writes in a recent Washington Post blog:
“Marriage is one of the unexpected causes of the growing income gap. Research from a team of international economists led by Jeremy Greenwood at the University of Pennsylvania found that a common measure of income inequality (known as the Gini index) is about 30 percent higher than it would otherwise be if better-educated people randomly married other people instead of marrying people with similar levels of education.
What this means is that income inequality has grown worse over time partly because highly-educated people are marrying other highly-educated people…”
This phenomenon is probably just a symptom of wealth concentration and not a cause, but either way, it is fun to think about what it may mean in terms of policy rationale. For example, there are many worthwhile initiatives aimed at having a greater proportion of low income students attend and graduate college. The scientific, well-documented argument is that this will enhance their skill set which will in turn improve their life-long earning potential. This is true, but how about if another reason is simply that they would be sitting in class on Valentine’s Day and may find their future partner there. This partner will likely make more money than someone they may have met in their community given that this future mate is on his/her way to graduating college. And again, money isn’t everything, but household income is still one of the most reliable variables to measure standard of living and overall economic well-being.
Economic textbooks would be so much more interesting if they taught about a Dating Possibilities Frontier as opposed to the Production Possibilities Frontier!
Wishing you a Happy Valentine’s Day and a right shift of your Dating Possibilities Frontier (sorry to my married readers – you have already maximized your utils)! Check out #Fedvalentines on Twitter. They have been quite entertaining in the past.