Yale Student Designs a Financial Education Program for Rio de Janeiro

Wednesday, February 5, 2014

In 2010, Brazilian freshman Paulo Costa (ES’14) mistakenly entered the lottery for freshman economics seminars and was placed into “ECON 110: Introductory Microeconomics” taught by Professor Tolga Koker. The prospective chemical engineer went to the first class meeting out of curiosity and stayed until the end of the course.

Three years later, Costa, now an aspiring development economist, designed and implemented a financial literacy and education program for the Secretary of Education of Rio de Janeiro. Costa was featured on O Globo, one of the biggest Brazilian newspapers, which devoted a full-page article to the 22-year-old Yale senior.

“At first, the teachers thought financial education was not that important because most of their students are from low-income families,” says Costa. “I told them financial education is actually more important for those students because it teaches them how to better allocate resources to reach their goals in life. It is important no matter how much money you have or make.”

Professor Gary Gorton from the Yale School of Management put Costa in touch with Armínio Fraga, former president of the Central Bank of Brazil, who brought Costa’s idea to the attention of the Secretary of Education of Rio de Janeiro. Costa started designing a program to better understand the current status of financial literacy in Brazil. He first conducted a national survey, interviewing 2000 people in more than 100 cities. Costa prepared a proposal on his own to secure funding from the Brazilian Stock Exchange (BM&F Bovespa). “The results from the survey showed that the low level of financial literacy in Brazil is largely due to the low level of mathematical skills of the Brazilian population,” explains Costa. The takeaway from the survey became the basis of his financial literacy and education program.

Since the program’s inception in 2012, he has trained 54 teachers from 28 public high schools in Rio to teach classes on how to manage budget and expenses. “I think everyone is interested in talking about money. When you use math skills to talk about money, you make math more interesting,” Costa explains. The 157-page book that he authored for the program covers budgets, percentages, interest rates, and other financial topics through mathematical practice and games. The textbook will be published and available to the public in late 2014.

After the launch, he also conducted a randomized controlled trial (RCT) to evaluate the impact of the program, proving that it increased the financial knowledge of the students and even motivated them to open savings accounts. Costa’s senior essay will further analyze the results from the national survey and his RCT experiment. The course will be expanded to a greater number of schools in Rio and will also be available online for every teacher and child in Brazil through Educopédia, an online education platform launched by the Secretary of Education.

Besides his recent work in Brazil, Costa has always devoted himself to solving social problems around the world. “Growing up in one of the poor areas in Rio definitely opened my eyes to social problems, and Yale has made me more aware of social inequality in the world,” says Costa. He was involved in New Haven Reads during his freshman year and volunteered in underserved communities in China, Rwanda, and India during past spring breaks. He is currently an Edward A. Bouchet Fellow and plans to pursue a Ph.D. in Economics.

The cold winter weather has Costa missing Rio’s beautiful beaches, but New Haven will always bring him warm feelings, because of the friends and professors he has met here. “The mentorship that I received from Yale is priceless, the amount of advice and help I got is something that you cannot put a price tag on.”


By So Yoon Sim