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Introduction
In recent decades, consumer financial education has drawn the attention of consumer financial policy makers, practitioners, and researchers (CFPB, 2015; FLEC, 2012; PACFC, 2013). Consumer financial education refers to any form of education on basic financial knowledge for consumers in high schools, colleges, and workplaces. Raising the level of financial literacy and encouraging desirable financial behaviors though financial education are assumed to enhance consumer financial capability and improve consumer welfare (Atkinson et al. , 2006; Huhmann and McQuitty, 2009; Mouna and Jarboui, 2015). Financial education is believed to improve financial literacy, motivate desirable financial behaviors, and enhance financial well-being among consumers (Lusardi and Mitchell, 2014).
A recent meta-analysis has examined many studies about financial education and literacy on financial behaviors and found mixed evidence (Fernandes et al. , 2014). However, new studies continue to show that financial education has positive effects on consumer financial behavior and welfare (Ambuehl et al. , 2014; Brown et al. , 2014; Wagner, 2015; Xiao and O'Neill, 2016). Much of the previous research in this area has focused on either associations between financial education and financial literacy or associations between financial literacy and financial behavior. To our knowledge, no previous research has looked at the association between financial education and financial satisfaction, a subjective measure of financial well-being. To fill this gap, this study investigates this association using the 2012 National Financial Capability Study (NFCS), a large national data set. The purpose of this study is to examine whether financial education contributes to financial satisfaction directly or indirectly through mediating factors such as financial literacy, behavior, and capability.
Conceptual framework, previous research, and hypotheses
Financial literacy has been defined as the level of financial knowledge and the ability to apply the knowledge to improve financial status (Lusardi and Mitchell, 2014; Huhmann, 2014). In the literature, financial literacy and financial capability are at times used interchangeably, both referring to the ability to apply certain levels of financial knowledge and perform desirable financial behaviors to achieve financial well-being (Atkinson et al. , 2006; Xiao, Chen and Chen, 2014).
Lusardi and Mitchell (2014) have developed a life cycle saving model that addresses the role of financial literacy. Under the traditional utility framework, they have incorporated several factors such as borrowing constraints, mortality...