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Dr. Abdullah Al-Bahrani, the director of the Center for Economic Education (CEE), recently published his paper, “Racial Differences in the Returns to Financial Literacy Education.”

Dr. Al-Bahrani’s research started when he and his co-authors wanted to understand possible reasonings behind the growing racial wealth gap. The wealth gap between white households and minority households has grown to approxmitly 13 fold. There are several possible reasons for this. One possible reason for the widening gap that has not been tested for in research is a financial literacy gap. Dr. Al-Bahrani and his co-authors found that financial literacy education is positively correlated with increased financial knowledge, however the magnitude of effect is not the same for everyone.

“We were surprised to find out that financial literacy education has different returns for whites than for minorities,” Al-Bahrani said.

One of Dr. Al-Bahrani’s responsibilities is to help educators in Kentucky prepare to teach financial literacy classes. House Bill 132 requires every high school student starting in 2020 take a financial literacy course.

“The findings of this paper indicate that we must pay attention to the financial literacy education resources provided to our school districts, and the policies we implement” Al-Bahrani said.

Dr. Al-Bahrani is countinuing his work towards identifying the reasons and solutions behind the financial wealth gap. Structure analysis of financial literacy education programs is just one of the puzzle pieces needed to help decrease the gap.

“At NKU CEE we are working hard to create Financial Literacy curriculum that is inclusive and represents the diversity of our society,” Dr. Al-Bahrani said. “We also pride ourselves in embracing research-based findings and use that to determine how we grow our programs.”

View the paper here.