Description of the programme

UPSKILL is a pan-Canadian research and demonstration project to provide the most reliable measures of the impacts and return on investment of literacy and essential skills training in the workplace. Over 100 firms and nearly 1,500 lower-skilled workers in the accommodations sector were enrolled in eight provinces.

The study

This study was commissioned by the Financial Consumer Agency of Canada to address potential gaps in understanding of the relationship between literacy, essential skills (including numeracy, communication, and thinking skills) and financial capability.

The sample used for the analysis in this report is composed of 524 UPSKILL participants who volunteered for the project and who completed the follow-up survey module on financial capability. Participants completed skills assessments and surveys before and after the training.

The research is based on the UK Financial Service Authority’s financial capability conceptual framework and the analysis included two primary components:

• A regression analysis to explore the relationship between financial capability and various individual factors.
• An impact analysis utilising the experimental design, to measure the effect of UPSKILL training on three financial capability domains.

What are the outcomes?

• the study considers three domains: making ends meet, keeping track of finances, and planning ahead.

Key findings

From the regression analysis, exploring the relationship between financial capability and various individual factors:

• The majority of the variance of the financial capability measures included in this study is attributed to socio-demographic and psychosocial characteristics:

age (over 35 years of age) was positively related with all three domains of financial capability;

the psychosocial characteristics resilience, motivation, self-efficacy and life-satisfaction were all positively related with making ends meet and keeping track;

stress and parental status (with children younger than 18 years) were both negatively related with making ends meet;

household income (above $30,000) and social networks were both positively associated with the ability to plan ahead.

• With respect to essential skills and financial capability, numeracy and thinking skills were positively related with financial capability

having higher numeracy was positively correlated with the ability to make ends meet while a higher level of thinking skills is positively correlated with the ability to plan ahead;

no statistically significant association was observed for document use, oral communication, and working with others on any of the three domains of financial capability;

document use was found to have a negative relationship with one measure on the domain of making ends meet, namely, keeping up with bills without problems.

Key findings from the impact analysis to measure the effect of UPSKILL training on financial capability domains were:

• UPSKILL training appears to have had a negative impact on the domain of making ends meet and that this effect arises among a particular subgroup of participants who are least likely to declare their income. Paradoxically, training has also led to improvements in literacy skills of participants, notably document use, along with accompanying gains in job retention and earnings.
• Based on these findings, the authors hypothesize that the negative impact on making ends meet may result from increased expenditures and possibly increased access and incidence of debt, rather than a deterioration of one’s financial situation.

The authors recommend the following areas of future inquiry:

• further study to explore causal relationships and whether financial capability of front-line workers in the accommodations sector can be enhanced;
• exploration of the development and evaluation of curricula, training tools, and delivery models focused on improving financial capability among front-line workers in the accommodations sector;
• additional industry or cross-sector studies in order to determine if these results are applicable to the broader Canadian population;
• further study of the apparent negative impact on the domain of making ends meet; and,
• further research to explore the complexities of the relationship between the various essential skills and financial capability.

Points to consider

• The research sample differs from the Canadian population on a few key characteristics: gender, university education, and country of birth. Participants volunteered to take part in the study so there may be sample bias compared to the general population on other characteristics.

• The study identifies behaviours, attitudes and characteristics associated with financial capability and offers insights into raising financial capability through skills training.

• There is limited information on how the study was designed and steps taken to account for any differences between the control group and programme group. The analysis is based on a fairly small sample (223 control group; 301 programme group participants). The study uses UK measures of financial capability so can be compared with UK studies.

Full report

Financial capability and essential skills - full report