Measurement and evaluation study
Study author: Eyal Carmel
Published Date: 01/11/2018
Published in: Ben-Gurion University of the Negev


Research Findings Effectiveness of a Medium-Term Financial Competency Program

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Towards a Dual Process Conception of the Selective Influence of Financial Literacy on Economic Behavior

The study deals with the availability of cognitive and mental resources that allow individuals to rely on their financial knowledge in decision-making processes.

In this brief, we have chosen to present only some of the findings and conclusions relating to Paamonim’s economic support program.

The study examined the factors influencing the success of Paamonim’s financial support program. Past studies have shown that interventions in the field of economic behavior have an effect that wanes relatively quickly.

The study included an analysis of nearly 6,000 cases of families who underwent financial support at Paamonim between 2011-2015 (excluding 2012).

In addition, two surveys were conducted among graduates of the escort program who participated in at least three meetings and completed the program 2-5 years prior to the survey, and 432 questionnaires were analyzed at the beginning or end of family accompaniment.

Key findings of the study

The families entered the program with an average of minus 783 NIS, graduated with a plus of 841 NIS, and after two to five years were left with a plus of 29 NIS. In other words, they did not return to the starting point where they entered the program.

Two routes to exit the situation have been identified:

  • Low income earners – a significant increase in income, there is almost no change in expenses.
  • High income earners – no change in income, significant decrease in expenses.

The program is effective (even compared to other programs), but mainly for people with resources who are not aware of their situation. Therefore, reflecting expenses, income, debts and assets at the beginning of the accompaniment process is a very effective tool. In addition, the program is very effective in instilling consumer principles, but people find it difficult to adopt the complex principles of budget management, planning, etc.

The vast majority of respondents have not experienced events such as bank account restrictions or credit card blocking in the past year (only 7% experienced this in the past year compared to 15% of the population).

At the same time, only a third of the respondents saved more than their monthly income, and there was an increase in the amount of the reported debt, from an average debt of NIS 91,000 at the end of the program to a debt of NIS 133,000.

Income has a huge impact on the status of participants at the end and after the program.

At the end of the program – those with low incomes are balanced, those with high incomes retain 4% of their income.

In the long run, low-income earners do not maintain budgetary balance.

In addition, there is a fading effect. A slow and moderate decline in economic behavior is still much better than it was before the plan. You actually reach a situation similar to that of the general population.

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