With a grant from the National Endowment for Financial Education, Professor Stephen Atlas leads an interdisciplinary study of financial literacy decay in young adults.

Research has shown that effective financial education strongly predicts a young adult’s overall financial capability and well-being. Yet, the research also shows that financial literacy is not as resilient as other learned skills.

“Much like wandering around a new city without a map, when we make financial choices without financial literacy we are prone to get lost,” said URI College of Business Assistant Professor Stephen Atlas, who focuses on marketing and consumer behavior and is principal investigator of URI’s Mental Accounting and Pricing Lab.

“There are many spending, credit, debt and risk management options available to people today, yet only one in five young adults has high financial literacy. This opens the door to predatory practices and is a recipe for lifelong financial suffering,” he said.

To address this issue and propose possible means to improve the outcomes, Atlas has received a $176,522 research grant from the National Endowment for Financial Education. For the grant, entitled “Understanding Financial Literacy Decay to Improve Financial Behaviors of Young Adults, ” Atlas has teamed with URI College of Health Sciences professors Nilton Porto and Jing Xiao, who specialize in personal and family finance.

The 18-month project that began in the fall, is studying relationships between financial education, financial capability and financial behaviors. The project aims to understand why financial education has a diminishing effect on financial behaviors over time and seeks to develop alternative methods to increase persistence of financial education.

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