A study out of the University of Arkansas at Little Rock says the financial literacy of prisoners exiting the Arkansas Department of Correction system is significantly lower than that of the state’s general public. The study also found the level of financial literacy was lower for non-white prisoners than for white prisoners.
Kenneth Galchus, a professor of economics at UALR, says increasing a prisoner’s financial literacy while in prison could help reduce recidivism.
“It’s just one extra hurdle that they have to overcome to get reintegrated back into society,” he said.
Galchus worked with researchers in the UALR Business and Criminal Justice Departments. The UALR Institute on Race and Ethnicity contributed funding for the research.
He says the next step will be to develop a financial curriculum for prisoners who are nearing the end of their sentences.
“Perhaps a 10 to 15 hour program that would cover such things as balancing a checkbook, how to write a check, why a credit score is important, how to get your free annual credit report, what a 401k plan is, just so we don’t set them up for failure from the beginning,” he said.
The study found that many prisoners lack basic financial skills like being able to balance a checkbook, or knowledge of how interest and credit card payments work.