Absence of conflict of interest.
Citation
Highlights
- The study's objective was to examine the impact of the Personal Financial Management Course (PFMC) on financial behaviors.
- The study used a difference-in-differences design to compare outcomes of enlisted soldiers who received the PFMC and enlisted soldiers who did not receive the PFMC. The study author used administrative data from the U.S. Army and the National Credit Bureau database and statistical models to compare the outcomes of the groups over time.
- The study found significant positive relationships between the PFMC and participation in retirement savings plans, average monthly contributions, and reduction of overall positive credit balances; however, these effects typically did not extend beyond the first year following PFMC participation.
- This study receives a moderate evidence rating. This means we are somewhat confident that the estimated effects are attributable to the Personal Financial Management Course (PFMC), but other factors might also have contributed.
Intervention Examined
Personal Financial Management Course (PFMC)
Features of the Intervention
Throughout 2007 and 2008, the U.S. Army required new enlistees to attend an 8-hour Personal Financial Management Course (PFMC) course with the hopes of assisting service members and their families in building wealth. The course was delivered as a portion of the required Advanced Individual Training (AIT) to be completed after basic training. The course was split into two sessions with information presented through lectures, slides, and handouts. Course information focused on basic financial principles, rules of thumb, and common financial decision processes that younger workers are most likely to encounter.
Features of the Study
The author used a difference-in-differences design to compare the outcomes of enlisted soldiers that received the PFMC and enlisted soldiers that did not receive the PFMC over time. Study participants were required to be enlisted in the U.S. Army and be scheduled to complete the AIT program following completion of their basic training program. Individuals that started the AIT program after the PFMC was implemented at their base comprised the treatment group. Individuals that started the AIT program before the PFMC was implemented at their base did not receive treatment comprised the comparison group. The average participant was 21 years of age, male, not married, and completed some level of high school. Data sources included administrative data from the U.S. Army and the National Credit Bureau database. Study data were collected from 13 U.S. Army bases in the continental U.S. The author conducted statistical models to compare differences in outcomes between the groups.
Findings
Knowledge and skills for money management
- The study found a significant positive relationship between PFMC participation and average military savings plan monthly contributions in years one and two.
- The study also found a significant positive relationship between PFMC participation and the reduction of credit balances in year one; however, this relationship was not significant in year two.
Considerations for Interpreting the Findings
The study author imputed the treatment variable (attendance date data) because exact attendance dates were not available in the administrative data set. To avoid overlap between the treatment and comparison group, the author removed participants that started the AIT in the month before, month of, or month after PFMC implementation at each individual's Army base.
Causal Evidence Rating
The quality of causal evidence presented in this report is moderate because it was based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to the PFMC, but other factors might also have contributed.