Combining development and education: Why do decision-making and social norms matter for financial education?

Abstract

Financial education for children involves the transmission of-and contributes to modify-knowledge and behaviours in and in relation to the economic domain, in different ways at different ages. From a psychological perspective, to make financial education for young people effectively it is necessary to consider two related matters: the nature of the decision-making process and the understanding of social norms evidenced by that process's features. Decision-making abilities can in this light be conceived as internal pre-requisites for educational interventions, and social norms as external constraints defining the contexts in which decisions are taken. After a brief overview of the main models of financial education devised by economists and psychologists in recent years, we present a review of the development of decision-making ability during childhood, focusing on the impact of social norms for our understanding of it.