Date post: | 29-May-2015 |
Category: |
Economy & Finance |
Upload: | oecd-directorate-for-financial-and-enterprise-affairs |
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OECD TOOLS TO MEASURE
FINANCIAL LITERACY AND
IDENTIFY CORE
COMPETENCIES
Adele Atkinson, PhD Policy Analyst Financial Education and Consumer Protection Unit High-level conference on global and European trends in financial education 22-23 May 2014 - Istanbul, Turkey
• Measuring Financial Literacy
– OECD/INFE measurement tool (use supported by G20 leaders in 2013)+ used in international measure in 2010; second one planned for 2015
– OECD PISA financial literacy assessment (future participation encouraged by G20 leaders 2013 and APEC leaders in 2012)
• Development of an international core-competency framework for youth (draft expected to be presented to G20 leaders in September 2014)
2
Outline
Behaviour 9 Q
Keeping track of money
Making ends meet
Choosing and using products
Short and long term planning
Knowledge 8 Q
Simple and compound
interest
Inflation- time value of money
Risk and return
Risk diversification
Attitudes 4 Q
Propensity to save vs
spend
Time preference (present vs
future)
Risk preference
(explanatory variable)
Financial inclusion
Awareness of products
Holding and using products
Savings habits
Socio-demographic information
Age
Gender
Education
Work
Income
3
Questionnaire content
Knowledge Maximum of 8
points
(High score 6+)
Behaviour Maximum of 9
points
(High score 6+)
Attitudes
Maximum of 5 points
High score is >3
2 combined measures
1) Overall score Maximum 22
2) Number of high scores
4
Analysis of financial literacy scores
5
% with high financial knowledge score
45% 46%
57% 61%
58%
69%
60%
51%
40% 41%
49%
33%
53% 57%
Alb
ania
Arm
enia
Cze
ch R
epu
blic
Esto
nia
Ger
man
y
Hu
nga
ry
Irel
and
Mal
aysi
a
No
rway
Per
u
Po
lan
d
Sou
th A
fric
a
Un
ited
Kin
gdo
m
BV
I
6
% with high financial behaviour score
39% 41%
48%
27%
67%
38%
57%
67%
59% 60%
43% 43%
51%
71%
Alb
ania
Arm
enia
Cze
ch R
epu
blic
Esto
nia
Ger
man
y
Hu
nga
ry
Ire
lan
d
Mal
aysi
a
No
rway
Pe
ru
Po
lan
d
Sou
th A
fric
a
Un
ite
dK
ingd
om
BV
I
7
% with positive attitudes
69%
11%
62%
46%
63%
69%
49% 53%
57%
71%
27%
54% 49%
67%
Alb
ania
Arm
enia
Cze
ch R
epu
blic
Esto
nia
Ger
man
y
Hu
nga
ry
Ire
lan
d
Mal
aysi
a
No
rway
Pe
ru
Po
lan
d
Sou
th A
fric
a
Un
ite
d K
ingd
om
BV
I
An international measure of financial literacy of youth
2012: Participation (voluntary) in 18 jurisdictions: Australia, Belgium (Flemish), China-Shanghai, Colombia, Croatia, Czech Republic, Estonia, France, Israel, Italy, Latvia, New Zealand, Poland, Slovak Republic, Slovenia, Spain, Russia, and USA
• Data on levels of financial literacy by
– country/economy
– maths/reading score
– socio-demographics
– experience with money
To be repeated in 2015
PISA cognitive assessment of
15-year-olds’ financial literacy
The PISA financial literacy assessment
framework: processes, content and context
Processes: mental strategies or cognitive approaches
Identify financial information
Analyse information in a financial context
Evaluate financial issues
Apply financial knowledge and understanding
Content: areas of knowledge and understanding
Money and transactions Planning and managing finances Risk and rewards Financial landscape
Contexts: applicable situations
Education and work Home and Family Individual Societal
Level 1
Level 2
Level 3
Level 4
Level 5
Described proficiency scale
Level 2 is the baseline: i.e. minimum level necessary for 15-year-old students to participate effectively and productively in society. Students who fail to reach this level will struggle to perform basic financial tasks in real life.
Level 5 students can apply their understanding of a wide range of financial terms and concepts to contexts that may only become relevant to their lives in the long term. (OECD 2014, forthcoming)
• Building on various resources:
– OECD/INFE work on financial education in schools
– PISA financial literacy assessment framework
– PISA analysis and described proficiency scale
– National learning and assessment frameworks
– Expert knowledge and feedback from INFE members
• Describing expected level of knowledge;
• awareness of key content; and
• behaviours and attitudes towards applying these in real life situations
An international core-competency
framework, describing expected outcomes
• The availability of tools to measure financial literacy among adults and youth makes it possible to:
– Described levels of financial literacy
– Compare across countries/groups/policies
– Identify changes over time
• Expert judgment and robust analysis can identify proportions with sufficient financial literacy
• In-depth study can provide a description of core competencies and the order in which they are developed
Conclusion
Questions? Comments?
Interested in participating in the 2015 adult financial literacy measure?
Please contact:
OECD/INFE financial education publications and
International Gateway
www.financial-education.org
Thank you