Educational Solutions for Financial Troubles: Policy Diffusion in Personal Finance Education Policy

Abstract

Recently many states have begun to adopt policies that require public schools to provide personal finance education (PFE) in their curriculum. However, it's not clear whether states are responding to perceived problems with young adults or that they are simply following fashionable policy trends. For example, in 1998 only 1 state required high school students to take a personal finance course, by 2009, 13 states had adopted this policy. I utilize a general model of state diffusion of innovative policies to understand state adoption of PFE policies. Analyzing state adoption of PFE polices from 2000-2010, I explore whether states are adopting PFE policies due to an internal problem environment, or as a result of neighboring and regional influences. I utilize cross-sectional time-series methodology to test specific hypothesis. My research builds on three related bodies of scholarship; the literature on policy innovation and diffusion, education policy literature, and the literature analyzing personal finance education policies.