A Theory of Economic Literacy Development in Higher Education Institutions

Thesis Abstract

This study addresses the persistent gap between economic theory instruction and students’ ability to apply economic reasoning in real-world contexts within higher education, which undermines graduates’ economic literacy and employability. Aiming to develop a robust theory of economic literacy development (ELD) in university settings, the research seeks to articulate a coherent framework that integrates cognitive, curricular, and institutional factors shaping students’ economic literacy trajectories. The specific objectives are (1) to delineate the construct of economic literacy and identify its dimensions across undergraduate and postgraduate programs; (2) to theorize the mechanisms through which instructional design, assessment practices, and media resources influence literacy development; (3) to formulate a parsimonious theoretical model linking prior knowledge, epistemic beliefs, and social-contextual factors to observed literacy outcomes; (4) to validate the model with empirical data from diverse disciplines within social sciences and business schools; and (5) to offer evidence-based recommendations for curriculum design and pedagogy that enhance economic literacy at scale. The study adopts a mixed-methods design, combining a cross-sectional survey with qualitative interviews to triangulate findings and develop the ELD theory iteratively. The population includes undergraduate and graduate students enrolled in economics, business, and social science programs at three large public universities. A stratified random sample of 1,200 students is targeted for the survey, ensuring representation by year of study, discipline, and prior economics exposure; a purposive subsample of 40 students and 20 faculty members will participate in semi-structured interviews to enrich interpretive depth. Data collection instruments comprise a validated Economic Literacy Scale (ELS) measuring conceptual understanding, analytical reasoning, and applied decision-making, supplemented by items capturing epistemic beliefs, instructional experiences, and perceived curricular coherence. Instrument validity and reliability will be established through pilot testing (n=120) and confirmatory factor analysis (CFA) confirming a multifactor structure with acceptable composite reliability (CR > 0.70) and average variance extracted (AVE > 0.50). Data analysis will proceed in two parallel tracks quantitative analysis using structural equation modeling (SEM) to test the proposed ELD model and assess causal pathways among latent constructs; and qualitative thematic analysis of interview transcripts to identify emergent themes and validate theoretical propositions. Model specification will integrate two established theories Bloom’s revised taxonomy for learning outcomes and the theory of situated cognition, augmented by an integration of epistemic virtue theory to capture students’ dispositions toward economic argumentation. Model fit will be evaluated through chi-square, RMSEA, CFI, and TLI indices, with multi-group SEM to examine invariance across disciplines and educational levels. Expected findings indicate that instructional design features such as authentic assessment, case-based teaching, and explicit metacognitive prompts will positively influence economic literacy through pathways mediated by prior knowledge and epistemic beliefs. It is anticipated that situated learning environments and disciplinary integration will strengthen the transferability of economic reasoning to real-world problems, while curricular coherence and alignment between learning outcomes and assessments will reinforce deeper literacy development. The study is poised to reveal differences in literacy trajectories between STEM-adjacent and non-STEM programs, highlighting critical leverage points for curriculum reform. Contributions to knowledge include (a) a theoretically grounded ELD framework that explicates dynamic development across higher education contexts; (b) an empirically validated model linking cognitive, affective, and institutional determinants of economic literacy; and (c) actionable guidance for policymakers, curriculum designers, and educators to scaffold durable literacy outcomes at scale. The main conclusion posits that economic literacy development in higher education is best advanced through an integrative framework that aligns instructional design, assessment, and curricular coherence with students’ epistemic development and authentic practice. Recommendations emphasize adopting case-based, interdisciplinary modules; embedding explicit literacy development objectives in syllabus design; deploying continuous assessment with formative feedback anchored in real-world economic decision-making; and investing in faculty development to foster epistemic virtues and disciplinary integration. The study also suggests avenues for future research, including longitudinal investigations to track literacy trajectories across degree programs and cross-cultural comparisons to assess contextual influences on ELD.