Why State and Federal Officials Should Consider Offering Financial Literacy Training to Those About to Be Released from Correctional Institutions

Abstract

There have been numerous studies over the years which have attempted to measure the financial literacy level of high school students, college students, and Americans in general. As opposed to the groups listed above, this article looks at the financial capability of prisoners in various Arkansas’ correctional institutions. The idea is that if people, upon their release from prison, don’t know such basic things as how to open a checking/savings account, don’t know how to balance a checkbook, and don’t realize the importance of saving for retirement, they are being set up for failure from the beginning. Using results from a 43 question financial capability survey filled out by 299 male inmates in Arkansas’ correctional facilities, and comparing them to results for 211 Arkansas’ males interviewed as part of the recent Financial Institute Regulatory Authority’s (FINRA) 2012 National Financial Capability Study, shows that the financial capability of inmates is even lower than that of males in the general population (which is already low). The conclusion is that there should be financial literacy training as part of prerelease programs designed to get inmates ready for reentry back into society, and this, in turn, may help to reduce the recidivism rate.