April is National Financial Capability Month, celebrating the importance of financial education and understanding barriers to financial well-being. This month we are proud to announce the release of several new publications from our Integrating Financial Capability and Employment Services project.
This project is designed to help build the research base on financial capability interventions that are delivered in the context of employment and training (E&T) programs serving individuals with low incomes. Financial capability interventions use tools such as financial education, coaching, and counseling. They work to improve economic outcomes by building financial skills, knowledge, and self-efficacy, as well as expanding access to resources and opportunities to promote positive financial behaviors. While E&T programs seem like a logical mechanism for delivering these interventions, there is little evidence of the effectiveness of this channel.
The research is guided by the following questions:
- To what extent are employment coaching or training programs incorporating financial capability training?
- Why are they incorporating financial capability training? What factors, including any state or local policies, drive this decision?
- What are the key inputs, activities, and outputs of financial capability trainings as implemented in employment and training programs?
- What are the efforts to evaluate financial capability training in employment and training contexts to date?
- What are the research gaps in these areas and options for future research and evaluation efforts to address them?
This project previously released two publications:
- a literature review on the effectiveness of financial capability interventions and what is known about efforts to deliver such interventions through E&T programs, and
- a brief that describes the design, administration, and financial and nonfinancial benefits of the Earned Income Tax Credit.
During this Financial Capability Month, we invite you to learn more about the findings of this exploratory study in these four new publications:
Understanding Financial Capability Interventions within Employment-Related Contexts for Adults with Low Incomes: Final Report
This report summarizes key findings about the approaches that organizations across the U.S. use to integrate E&T and financial capability services, their motivations for doing so, details on the types of financial capability services involved, participants’ perspectives on integrated services, and considerations for future research on the effectiveness of integrated models. With a survey sample of 62 organizations, the study finds that financial education was the most common service offered, with organizations also offering coaching and financial access services. Organizations typically offered both E&T services and financial capability services, as many said they saw the two types of services sharing a common goal of empowering participants and improving their economic well-being.
Preemployment Credit Checks: Employer Practices, Worker Outcomes, and Implications for Practice and Research
This brief provides an introduction to preemployment credit checks for practitioners working to support individuals with low incomes who may be affected by this practice. Given that nearly half of employers in the United States review information from credit reports as part of their hiring process, these checks have the potential to have a significant impact on economic security for workers. This brief shares strategies for how programs and practitioners who are interested in working to improve economic outcomes for individuals with low incomes could use the information provided to serve this population more effectively. Integrating financial capability programs into E&T programs is one such strategy.
Investing in Employee Financial Well- Being: Employer-Provided Financial Capability Services
This brief draws on interviews with 10 employers to describe why and how employers offer financial capability services for employees, what they have learned from offering such services, and how they see the services as influencing employee well-being. These employers all offer financial capability services to their staff with low and moderate incomes. They represent industries including clothing retail, employment services, food manufacturing, health care, and hospitality, and they range in size from less than 100 employees to more than 19,000. Employers who were interviewed reported similar motivations for offering these types of services, most commonly around supporting employees’ financial well-being.
Integrating Financial Capability and Employment and Training Services: Participant Perspectives
This brief uses a composite narrative approach to describe the perspectives of individuals with low incomes who participated in programs that integrate employment and training (E&T) and financial capability services, including their recommendations for programs. We close this blog post with a quote from one participant.
"The program's focus was how are you going to make it long term? ...Not, how are you going to make it paycheck to paycheck? -- But how can we set this up to where you eventually don't need services? You don't need any of these things. You'll be able to be self-sufficient."