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CMU professor selected for major financial literacy research advisory group
Dr. Jerry Buckland was recently selected to be a member of the Research Advisory Group with the International Network on Financial Education.
Jerry Buckland, PhD, CMU Professor of Economics and International Development Studies, was recently selected to be a member of the International Network on Financial Education (INFE), a leading institution in the field of financial literacy and education.
The INFE is a project of the Organization for Economic Co-operation and Development (OECD), an organization with headquarters in Paris and approximately 70 member countries, which works to measure and improve financial literacy around the world. Buckland says, "The OECD's INFE has been a pioneer in promoting financial education internationally."
He was appointed to the network's Research Advisory Group, a body that meets four times per year and comprises 10–15 members. It is chaired by Annamaria Lusardi, a professor at Stanford University and a prominent person in the field worldwide. The Research Advisory Group supports and guides the OECD/INFE's research, which focusses mainly on measuring financial literacy and evaluating the impact of financial literacy programs.
"Financial services and products have rapidly changed, especially in the last 20 years... financial products are becoming more financially sophisticated and complicated," Buckland says. "Financial education is part of the antidote. We need more education, and appropriate education to better empower people."
Buckland has been researching in this area for several years. He's looked particularly at financial exclusion, including which populations don't have decent access to credit, savings, and information about financial products. "Why is it that certain people, most notably low-income people, racialized minorities, Indigenous people, tend to be excluded from accessing banking services?" he asks.
Through the Canadian Financial Diaries Research Project, he and his team have been seeking to better understand the finances of vulnerable Canadians. The diaries process involves financial diaries filled by study participants and regular interviews. The aim is to better understand their finances and to amplify the voices of low-income Canadians around finances in order to foster financial empowerment. He's received major federal grant funding for this research from the Social Sciences and Humanities Research Council.
Buckland has also partnered with community not-for-profit organizations in Winnipeg and Calgary that work closely with low-income communities, learning from them and introducing a pilot project that might benefit them. He is committed to "making connections between the research results and policy making and practice, to make sure that the research is having a positive effect on policies and practices of financial education and financial regulation."
Buckland has been a member of the the Financial Consumer Agency of Canada's (FCAC) Research Committee since 2018. The FCAC is the Canadian government's regulator of banks around consumer protection issues and is responsible for boosting financial literacy in Canada. It's also a partner organization of the OECD.
Buckland will be bringing his particular knowledge and experiences to the OECD/INFE Research Committee, too. He is intrigued about the set of questions that researchers most commonly ask people in financial literacy measurement studies: whether they understand how inflation affects interest rates, how compound interest works, and what are the trade-offs between risk and reward in investments. They survey thousands of people across income ranges and assess their financial literacy based on their knowledge about these universal indicators.
"They'll inevitably find that low-income people do relatively poorly compared to others—they don't get the answer correct as often. So, what those studies tend to conclude is that low-income people are less financially literate than are middle-income people," Buckland says. "What I see is that low-income people are very good managers—in the realm of finances they are able to control, they control them very well."
"I've been quite critical of that national perspective that says, if you don't know the answers to these three questions, you're not financially literate... There's a different set of questions that a low-income person needs to be able to answer for them to be able to manage their finances," Buckland explains. "Most low-income people are saying, why would I know about compound interest? I don't have any money to save."
"From my perspective it tends to reinforce the stigmatization of poor people... It prevents us from doing real research about what low-income people need to become more financially capable... If we say the only way for you to improve your financial well-being is to learn these things that are needed if you've got lots of savings, it's just not going to take us very far," he says. "That's what I want to bring to this committee."
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