Selection into Financial Education and Effects on Portfolio Choice

We study the effect of a financial education intervention on portfolio choices in a unique incentivized setting that allows us to investigate selection into the intervention and treatment effect heterogeneity. After directly eliciting willingness to pay for the financial education, we find that the more financially literate, those confident they can apply the knowledge acquired in the intervention, and those expecting higher returns are willing to pay more. Using portfolio allocation tasks, we show that the financial education leads to better outcomes according to welfare metrics tailored to respondent risk aversion: there is a 20 p.p. increase in the fraction with a welfare gain, representing on average 3.2 p.p. of wealth. Those most willing to participate are those who gain the most from the education, which has important implications for the design of financial education across a variety of settings.