Financial security center receives Social Security Administration award
The University of Wisconsin–Madison Center for Financial Security has received first-year funding of $1.48 million to participate in the Social Security Administration’s new Financial Literacy Research Consortium (FLRC).
As a member of the FLRC, the Center for Financial Security will participate in conducting and disseminating applied research on financial literacy and consumer behavior with a focus on savings, borrowing and spending of special populations. Special interests of the research include financial issues for families in transition and people with disabilities and their caregivers; financial decision-making by the elderly; financial knowledge among vulnerable populations; and the role of education, counseling and coaching in overcoming financial literacy deficits. This research is expected to have implications for consumer behavior, public policy and financial-planning professionals, increasing understanding of how to better prepare for retirement and to increase security over economic cycles and through personal financial shocks.
The FLRC-supported research will include projects requiring extensive quantitative data analysis, as well as those gathering data through qualitative interviews and focus groups. Funded projects will define and identify forms of financial literacy during the life course and among low-income and other specific populations. This research will also explore “teachable moments,” times that motivate a change in financial behavior, and identify potential financial education strategies for targeted populations.
“Financial literacy is a lifelong process that can begin as early as reading literacy and continue throughout life,” says J. Michael Collins, assistant professor of consumer science and faculty director of the Center for Financial Security. “Financial literacy is shaped by cognitive development and life circumstances as people move from education into careers and, eventually, retirement. The FLRC supported research takes this life-course perspective.”
“Our developing Center for Financial Security has worked to clarify its role in helping consumers understand the complex factors impacting financial decisions,” says Robin Douthitt, dean of the School of Human Ecology. “The Social Security Administration support will enable the center to expand its research for the benefit of underserved populations and create a network to carry best practices to our most vulnerable consumers.”
“Like other research centers on campus, this is an interdisciplinary center,” says Karen Holden, emeritus professor of consumer science and public affairs who, along with Collins, is FLRC co-director. “While the center will be housed within the School of Human Ecology, we’ll rely on many campus and off-campus partners.”
Campus partners include the Waisman Center, Center for the Demography and Health of Aging, Institute for Research on Poverty and Cooperative Extension. The FLRC will also work with Abt Associates on field research, as well as community based organizations across the country.
The Center for Financial Security will sponsor a symposium, “Family Financial Security: Implications for Policy and Practice,” on Monday and Tuesday, April 19-20, at the Fluno Center for Executive Education at UW–Madison. The symposium will convene leading applied researchers and practitioners to present current thinking across disciplines. Four panels — credit, retirement saving, thrift and banking — will each feature several papers. Participants will discuss how innovative programs, policies and products can best promote family financial literacy.
“We are reaching out to invite applied scholars and practitioners who have developed new theories and practices related to family financial security,” Collins says. “The FLRC will benefit and build from the symposium dialogues.” Researchers interested in learning more about the April symposium may contact project assistant Melissa Berger at firstname.lastname@example.org.
The Social Security Administration has also established Centers for Financial Literacy at Boston College and the RAND Corp. Each center arose from a competitive grants process and each will have a different focus of work.