Combining Development and Education: Why Do Decision-Making and Social Norms Matter for Financial Education?

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 effective 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.