Transcript

Jessie Romero: I'm Jessie Romero, director of publications in the Research Department at the Federal Reserve Bank of Richmond.

Today, we'll be talking about economic and financial literacy and the role of the Federal Reserve in educating teachers, students and the general public about these topics. We'll also talk about some of the challenges facing educators as a result of the COVID-19 pandemic.

With me today are two members of our Economic Education team. Sarah Gunn leads the team, which delivers innovative programs and writes educational materials to enhance the public's understanding of economics, personal finance and the Fed. David Bass is an economic education outreach specialist who leads our strategy to promote the Richmond Fed's economic and financial education resources. Sarah is a former educator and David has a background in public relations.

Thanks so much for joining us, Sarah and David.

Sarah Gunn: Thank you for having us.

David Bass: Thank you.

Romero: Let's start with some context about economic and financial literacy. Why is it important for high schoolers to graduate with a basic understanding of economics and personal finance?

Gunn: Teaching economics and financial literacy is important because it helps people make informed decisions.

The research suggests that knowledge of core financial concepts is associated with one's ability to navigate tough choices about spending, education, employment, and retirement. Providing this information at a young age helps build a foundation for the decisions they will make later in life. The earlier we can instill these good financial habits, the more we can minimize the number of mistakes they'll make as adults.

In addition to exposing students to [a] new vocabulary, we want to equip them for a world that is quickly changing. This means teaching them the critical thinking and problem-solving skills they'll need to make any financial decision in the future.

Bass: We also want students to understand the role the Federal Reserve plays in the economy. Monetary policy is used to achieve the goals of price stability and maximum employment, but it can have a direct impact on an individual's financial decision making.

The Fed's mission is to foster a healthy, growing economy, and individual decisions and outcomes matter.

Romero: I assume there are curriculum requirements for financial education, just like there are for other subjects like math or science. What are K through 12 students in [the Fifth Federal Reserve District] expected to know about economics and personal finance?

Gunn: That's a great question.

There are national standards in economic and financial literacy that were written by experts and published by the Council for Economic Education. But they're voluntary.

They do serve as the gold standard. While they cover a large number of topics, the general idea is to help students think like an economist, which means helping them evaluate trade-offs and opportunity costs.

Each state, and sometimes counties or school divisions within a state, have the authority to set their own curriculum standards and graduation requirements. So, we really have to look at each state in our region individually.

In Virginia, North Carolina and South Carolina, a course in economics and personal finance is now a requirement for high school students. West Virginia teaches those topics, too, but they are part of other classes rather than as a stand-alone course.

Maryland has standards in economics and financial literacy for younger students, while the District of Columbia has economics standards but no standards for personal finance.

Romero: How have these standards changed over time, for better or for worse?

Bass: Over time, more of the states in the Fifth District have offered economics and personal finance classes, and more of those classes have become graduation requirements. However, there hasn't been the same growth in testing which would help us measure the effectiveness and impact of these changes.

Teachers are thoroughly teaching their students about the topics they're required to cover, and we have evidence of that. In Virginia, for example, a lot of students are given a standardized test to certify that they are "financially literate." In 2019, nearly half of the top 100 schools nationwide that scored well on that test were in Virginia.

But there are two challenges. As Sarah mentioned, not all states require financial education for their students and not at the depth that improves their decision making. So, in a lot of communities, students are graduating high school without much financial literacy. They are left to learn it on their own through trial and error.

Then there is the challenge of evaluating the effectiveness of financial education efforts in the long run. How much impact does financial education in high school have on a student's economic outcomes? Evidence shows there is a positive correlation and more in-depth financial education is more effective. But this is something we'll need to keep looking at over time and decide what works and what doesn't.

Romero: So, what is the Richmond Fed doing — and the Federal Reserve System more generally — to support economic and financial literacy?

Gunn: We've developed educational resources such as lessons, activities and online courses that teachers, parents and others can use to help explain these economics and personal finance topics. We've made sure that our resources are aligned with the curriculum standards and, through professional development programs, we make sure educators know how to use these resources with their students.

There are a lot of financial education resources out there, so the Richmond Fed tries to make a difference by focusing our efforts on an important decision that students will be making early in life – how much to invest in their own human capital. This connects back to the Richmond Fed's focus on workforce development.

We offer an online course called Invest in What's Next that helps students decide what to do after high school. We also connect teachers and students to the work of the economists at the Richmond Fed through programs such as Evening with the Fed and Richmond Fed on Campus.

To help us make sure we're continuing to meet the needs of educators in the [Fifth] District, we gather feedback and input from them through our advisory group, the Teacher Collaborative Committee.

Romero: With students and teachers adjusting to virtual learning, either full time or part time, has the pandemic impacted economic and financial education specifically in any way?

Bass: It has definitely been a challenging year for everyone, and we are truly grateful for teachers and all they do for their students. They have had to learn how to do their job in a whole new way in a very short amount of time. We're only beginning to understand the potential impact this will have on students and student outcomes.

However, this is also an interesting time to be teaching economics and personal finance. The pandemic has provided an opportunity to illustrate abstract concepts using current events. Teachers also play a unique role in helping students translate the economic information they might be hearing on the news as their families grapple with the hardships they face as a result of the pandemic.

Romero: How have you adjusted your own approach to economic and financial education during the pandemic?

Gunn: Just like teachers have had to adjust, we have too. We've moved our current programming to a virtual environment. It has required us to come up with new ways to engage audiences.

For example, we developed new programs around current topics such as the pandemic and racial disparities. This includes the "Economic and Monetary Policy Update for Educators," the "Ask an Economist Town Hall for Students," and our Evening with the Fed and Richmond Fed on Campus programs.

We have also re-examined and refreshed the format of our Teacher Collaborative Committee. The 2021 committee will meet virtually, which allows educators in all regions of the Fifth District to participate.

We also know that not all instruction can happen online, so we are still in the position to ship physical resources to teachers and students by request.

Bass: I want to be sure to mention the variety of organizations that are engaged in economic and financial education in our region. There are state councils on economic education in most of our states, the Treasurer's Office for the state of West Virginia, and organizations like Junior Achievement and the Jump$tart Coalition whose goals are similar to ours. We collaborate with them to make sure the needs of teachers and students are being met.

Many of these organizations were forced to pivot their programs in response to the shift to virtual and distance learning as well. As the school year goes on, we are all grappling with an increasing amount of "Zoom fatigue." 

Romero: I definitely empathize with the Zoom fatigue, as I'm sure many of our listeners do.

This year is the 10^th anniversary of the Fed Experience, the Richmond Fed's museum. Can you tell me a little bit about what the museum does?

Gunn: Sure. The Fed Experience welcomes members of the general public, students and teachers into the Federal Reserve Bank of Richmond so they can learn more about how the Fed affects their everyday lives.

We are proud of what we have done over the last 10 years. We welcomed over 52,000 visitors out to the museum.

Romero: Well, it must be a challenging time to mark the occasion now that we have adjusted to a virtual world. How do you see your work evolving for the next 10 years?

Gunn: We will continue to focus on how best to deploy and adapt all of our content in a way that meets our audiences where they are — not where we are.

Romero: Sarah and David, thank you so much for talking with us today. And thank you so much for your work for educators in the Fifth District.

Gunn: Thanks for having us.

Bass: Thank you.