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Students’ financial literacy:
results from PISA 2015
Andreas SCHLEICHER
The PISA financial literacy test
• In 2015, around 48 000 students were assessed in financial literacy, representing about 12 million 15-year-olds in the schools of the 15 participating countries and economies
• Students in countries and economies that participated in the financial literacy answered– a two-hour combination of tasks in science, reading and mathematics
– A one-hour test in financial literacy (43 items) after the core assessment
– Questions about their experience with money such as discussing money matters with parents, basic financial products and sources of money (through a ‘money management questionnaire’)
… in addition to the standard questions about their personal background
Some 56% of 15-year-olds in participating OECD countries and economies have a bank account,
19% have a prepaid debit card
Young people are already financial consumers and will soon
encounter complex financial decision, like student loans
Some 64% earn money from some type of work
activity
56%
64%But fewer than one in three students have the
skills to manage a bank account 31%
0 10 20 30 40 50 60 70 80 90
Peru
Brazil
Chile
Lithuania
Russian Federation
Slovak Republic
China
Italy
Belgium
Poland
Spain
Canada
Netherlands
Australia
United States
Made payments online using the Internet Made a transaction using a mobile phone
Many young people use digital financial products
Source: World Bank Global Findex, 2014
Percentage of young people age 15-24 who have:
%
• On average across participating OECD countries and
economies, 84% discuss money matters with their
parents at least once a month
• Students who do so tend to perform better in financial
literacy
Students acquire financial skills from their parents…
But up to what their parents can transmit them
• But financial skills are strongly related to the
socio-economic background of their family
• Advantaged students score 89 points higher in
financial literacy than disadvantaged students
84%
89 score
points
Globalisation and digital technologies have made financial products
and services more widely accessible but also more challenging
• More challenging financial choices
– The spread of digital financial services opens up new opportunities for financially excluded people to access the formal financial system…
– but also exposes consumers to new security threats and risks of fraud that are compounded when low financial literacy is combined with poor digital skills and low cyber security awareness
• More financial risks
– Increased life expectancy, less welfare protection, more “individualized” pensions, and more uncertain economic and job prospects due to digitalization, technological change, globalization
• Growing inequality
Financial education is a complement
to financial consumer protection, inclusion and regulation
• More challenging financial choices
– The spread of digital financial services opens up new opportunities for financially excluded people to access the formal financial system…
– but also exposes consumers to new security threats and risks of fraud that are compounded when low financial literacy is combined with poor digital skills and low cyber security awareness
• More financial risks
– Increased life expectancy, less welfare protection, more “individualised” pensions, and more uncertain economic and job prospects due to digitalisation, technological change, globalisation
• Growing inequality
Financial literacy
Consumer protection and
regulation
Knowledge and understanding of financial concepts and risks…
…and the skills, motivation and confidence to apply such knowledge and understanding…
…in order to make effective decisions across a range of financial contexts, to improve the financial well-being of individuals and society, and to enable participation in economic life
Financial literacy in PISA
What does financial literacy mean for the lives of 15-year-olds?
• …if they go to the cinema, will they still have enough money for the bus fare home? Or would it be better to buy pizza and invite friends home?
Balance their priority and plan what to spend money on
• …a games console will need new games, a motorbike will need fuel, tyres and services
Remember that some of the purchases have ongoing costs
• …Some emails that look like they came from their bank might not be legitimate, they should know what to do if they are not sure
Being alert to possible fraud
• …If their phone gets stolen, they should ask their parents if it is covered by their household insurance
Knowing what risk is and what insurance is meant for
• …they should know that if they buy a computer on credit they will have to pay interest on the loan, on top of the advertised price for the compute
Make an informed decision about credit
PISA framework for financial literacy
Content
Money and transactions
Planning and managing finances
Risk and reward
Financial landscape
Processes
Identifying financial information
Analyse information in a financial context
Evaluate financial issues
Apply financial knowledge and understanding
Contexts
Education and work
Home and family
Individual
Societal
0
10
20
30
40
50
60
70
80
90
100
Ita
ly
Spain
Un
ite
d S
tate
s
Ca
nad
ian
pro
vin
ce
s
Ch
ile
Austr
alia
OE
CD
avera
ge-1
0
Slo
vak R
epub
lic
Ru
ssia
Lithu
ania
Pola
nd
B-S
-J-G
(C
hin
a)
Ne
therl
and
s
Belg
ium
(F
lem
ish
)
%
Working outside school hours (e.g. a holiday job, part-time work)
Working in a family business
Occasional informal jobs (e.g. baby-sitting or gardening)
Any work activity (working outside school hours and/or working in a family business and/or occasional informal jobs)
Some 64% of students earn money
from some formal or informal work activity
Table IV.5.15
Percentage of students who receive money from:
0
10
20
30
40
50
60
70
80
90
100
Ch
ile
Pola
nd
Ru
ssia
Ita
ly
Lithu
ania
Slo
vak R
epub
lic
B-S
-J-G
(C
hin
a)
Spain
Un
ite
d S
tate
s
OE
CD
avera
ge-1
0
Belg
ium
(F
lem
ish
)
Ca
nad
ian
pro
vin
ce
s
Austr
alia
Ne
therl
and
s
%
Students holding a bank account
Students holding a bank account who perform below proficiency Level 4
Often two out of three of the students who hold a bank
account do not have the skills to manage such an account
Table IV.5.13b
At Level 4, students can
apply their understanding of
complex financial concepts,
interpret and evaluate
financial documents such as
a bank statement, and make
financial decisions taking into
account longer-term
consequences, such as
understanding the overall
cost implication of paying
back a loan
Students who have a bank
account but do not reach
proficiency Level 4
Students using basic financial products or earning from work
0
10
20
30
40
50
60
70
80
90
100
Net
her
lan
ds
Au
stra
lia
Can
adia
np
rovi
nce
s
Bel
giu
m(F
lem
ish
)
OEC
Dav
erag
e-1
0
Ital
y
Un
ited
Stat
es
Spai
n
B-S
-J-G
(Ch
ina)
Ru
ssia
Slo
vak
Rep
ub
lic
Lith
uan
ia
Ch
ile
Po
lan
d
%
Student has a prepaid debit card but no bank account Student has a bank account but no prepaid debit card
Student has both a bank account and a prepaid debit card Student earns money from a work activity
• Percentage of students in Australia at bachelor’s, master’s or doctoral levels who had a public student loan in 2013/14
79%
• Percentage of bachelor’s-degree students in the United States who had a public student loan in 2013/14
62%
• Average amount of debt students graduate with in the Netherlands
USD 18 000
• Average amount of debt students graduate with in Canada
USD 12 000
In some countries, students nearing the end of compulsory
education will soon decide whether to take a student loan
Source: Education at a Glance 20160 20 40 60 80 100
Australia
United States
Netherlands
ParticipatingCanadianprovinces
%
Percentage of 15-year-old students
who perform at Level 4 and above
Countries vary in how well they prepare students for the financial world
…and in how quickly they improve outcomes
B-S-J-G (China)
Belgium (Flemish)Canadian provinces
RussiaNetherlands
Australia
United StatesPolandItaly
Spain
LithuaniaSlovak Republic
Chile
Peru
Brazil
380
400
420
440
460
480
500
520
540
560
580Mean performance in
financial literacy
Mean financial
literachy scoreFigure IV.3.2
-30
-20
-10
0
10
20
30
Ru
ssia
Ital
y
Un
ite
d S
tate
s
Be
lgiu
m (
Fle
mis
h)
OEC
D a
vera
ge-7
Spai
n
Slo
vak
Rep
ub
lic
Au
stra
lia
Po
lan
d
Three-year score-point difference
Change between 2012 and 2015
-30
-25
-20
-15
-10
-5
0
5
10
15
Lithu
ania
Slo
vak R
epub
lic
Pola
nd
Austr
alia
Spain
Bra
zil
OE
CD
avera
ge-1
0
Ne
therl
and
s
Ca
nad
ian
pro
vin
ce
s
Peru
Ru
ssia
Belg
ium
(F
lem
ish
)
Un
ite
d S
tate
s
Ch
ile
B-S
-J-G
(C
hin
a)
Ita
ly
Before accounting for performance in other subjects
After accounting for performance in mathematics and reading
Few gender differences in mean scores…Figure IV.4.4
Sco
re-p
oin
t d
iffe
ren
ce
Girls perform better
Boys perform better Gender differences in
financial literacy may be
related to different
opportunities for learning,
different contexts in
which men and women
grow up and live, and to
a possible variation of
these factors across
generations.
Difference between boys and girls
0
10
20
30
40
50
60
Pe
ru
Bra
zil
Lith
uan
ia
Chile
Slo
va
k R
ep
ub
lic
Sp
ain
Italy
Po
lan
d
Russia
Unite
d S
tate
s
OE
CD
avera
ge
-10
Au
str
alia
Neth
erl
an
ds
Ca
nad
ian
pro
vin
ces
Be
lgiu
m (
Fle
mis
h)
B-S
-J-G
(C
hin
a)
Boys
Girls
…but more boys than girls are low performersFigure IV.4.5
0
10
20
30
40
50
60
Boys
Girls
Stu
den
ts b
elo
w
Lev
el 2
Stu
den
ts a
t
Lev
el 5
%
%
Relationships matter
Parents have a significant role, but not all parents can play this role
420
440
460
480
500
520
Students who discussmoney matters more
often with friends thanwith parents
Students who discussmoney matters equallyoften with parents and
friends
Students who discussmoney matters more
often with parents thanwith friends
Score
poin
tsRelationships matter: Financial literacy, family and friends (after accounting for social background)
Figure IV.5.2
1.0
1.5
2.0
2.5
3.0
3.5
Slo
vak R
epub
lic
Ru
ssia
Ita
ly
Pola
nd
Bra
zil
Lithu
ania
Spain
Ca
nad
ian
pro
vin
ce
s
OE
CD
avera
ge-1
0
Ch
ile
Un
ite
d S
tate
s
Peru
Ne
therl
and
s
Austr
alia
Belg
ium
(F
lem
ish
)
Od
ds r
atio
s
Increased likelihood of socio-economically disadvantaged students to be low performers in financial literacy
Even after looking at students with similar math and reading
performance, disadvantaged students are about twice as likely as
advantaged students to be low performers
Table IV.4.25a
300
350
400
450
500
550
600
650
Peru
117
Bra
zil
7
8
Ch
ile
103
Slo
vak R
epub
lic
80
Lithu
ania
71
Spain
79
Un
ite
d S
tate
s
97
OE
CD
avera
ge-1
0
89
Ita
ly
60
Pola
nd
73
Austr
alia
10
7
Ne
therl
and
s
10
4
Belg
ium
(F
lem
ish
) 1
10
Ru
ssia
4
6
Ca
nad
ian
pro
vin
ce
s
77
B-S
-J-G
(C
hin
a)
1
32
Sco
re p
oin
ts
Wealthiest quarter (ESCS)
Third quarter
Second quarter
Poorest quarter
Difference
between students
in the top quarter
and students in
the bottom
quarter of this
index
Socio-economically advantaged students score 89 points higher
than disadvantaged students, on average across the OECD,
equivalent to more than one PISA proficiency level
Table IV.4.11
Mean score, by quarters of the PISA index of economic, social and cultural status (ESCS)
Financial literacy skills is more than reading and math
-40
-30
-20
-10
0
10
20
30
40
Lithu
ania
Spain
Slo
vak R
epub
lic
Pola
nd
Ch
ile
Ita
ly
OE
CD
avera
ge-1
0
Ne
therl
and
s
Bra
zil
Austr
alia
Un
ite
d S
tate
s
Peru
Ca
nad
ian
pro
vin
ce
s
Ru
ssia
Belg
ium
(F
lem
ish
)
B-S
-J-G
(C
hin
a)
Sco
re-p
oin
t d
iffe
ren
ce
Students’ performance in
financial literacy is lower
than the performance of
students with similar scores
in mathematics and reading
Students’ performance in
financial literacy is higher
than the performance of
students with similar scores
in mathematics and reading
Figure IV.3.12
Difference between the actual financial literacy score and the score predicted by students’
performance in mathematics and reading
Highest performing countries/economies
Learning by doing
Students develop financial and economic understanding, skills and habits not only through talking to parents and observing their
behaviour, but also via personal experiences and learning by doing
On average, students who hold a bank account perform better in
financial literacy than students of similar socio-economic status
who do not have a bank account
Figure IV.5.5
-20
0
20
40
60
80
100
Slo
vak R
epub
lic
Ru
ssia
Lithu
ania
Pola
nd
B-S
-J-G
(C
hin
a)
Ch
ile
Un
ite
d S
tate
s
OE
CD
avera
ge-1
0
Ita
ly
Belg
ium
(F
lem
ish
)
Austr
alia
Spain
Ca
nad
ian
pro
vin
ce
s
Ne
therl
and
s
Sco
re-p
oin
t d
iffe
ren
ce
After accounting for socio-economic status Before accounting for socio-economic status
Difference between students who have a bank account and students who do not
Students who receive pocket money for doing chores at home, those who earn
money from part-time jobs or in a family business score lower in financial literacy
Students who receive gifts of money score higher in financial literacy.
Gifts may be related to higher financial literacy if they provide an occasion for students to think about their saving and spending
decisions, but also if high-performing students receive money as a reward for school performance
Sources of money and financial literacy
• Boys are more likely than girls to be involved in regular work activities, and to receive money in exchange for work, while girls in some countries and economies are more likely than boys to receive money in the form of allowances or gifts
• Socio-economically advantaged students are more likely to receive money from occasional informal jobs, such as babysitting or gardening, and from gifts than disadvantaged students. Disadvantaged students are more likely to earn money by working outside of school hours than advantaged students
Other findings
Financial literacy and forward-looking thinking
On average across countries, high-performing students are more than three times as likely as students without baseline financial skills to say they would save rather than buy the item anyway
Hypothetical spending behavior is not associated with gender and only weakly with social background
1.00
1.50
2.00
2.50
3.00
3.50
Try to borrow moneyfrom a family
member
Try to borrow moneyfrom a friend
Save up to buy it Not buy it
Odds r
atio
Level 2 or 3 Level 4 or 5
Students' financial literacy is associated with understanding
the value of saving (after accounting for math and reading and social background)
Figure IV.6.2
High performing students are
more than three times as likely
as low-performing students in
financial literacy to choose the
statement "Save up to buy it"
rather than "Buy it with money
that really should be used for
something else“, after
accounting for performance in
mathematics and reading and
other characteristics.
Financial literacy and student motivation
0
5
10
15
20
25
30
35
40
45
50
I want to be able toselect from among the
best opportunitiesavailable when I
graduate
I want top grades inmost or all of my courses
I see myself as anambitious person
I want to be one of thebest students in my class
I want to be the best,whatever I do
Score-point differenceBefore accounting for performance in other domains
After accounting for performance in mathematics and reading
Financial literacy
skills for all
students
Address the needs of low-performing
students Tackle socio-
economic inequalities
early on
Provide equal opportunities for learning to boys
and girls
Help students make the most of
available learning opportunities at
school
Target parents at the same time as
young people
Provide young people with safe opportunities to
learn by experience outside of school
Evaluate the impact of
initiatives in and outside of
school
A multifaceted policy agenda
• Over 50 countries have or are developing a financial
education strategy that…
– recognizes the importance of financial education – including
possibly through legislation – and defines its meaning and scope
– involves the co-operation of different stakeholders as well as the
identification of a coordinating body
– establishes a roadmap to achieve specific and predetermined
objectives within a set period of time
– provides guidance for individual programmes in order to efficiently
and appropriately contribute to the national strategy
National strategies for financial education
• Several countries started introducing financial literacy
elements in the school curriculum into existing subjects,
built teacher capabilities and developed instructional
materials
• Some examples for evaluating financial education in
school (Brazil, Italy, Spain, US)
Initiatives in school
• Videos, competitions, interactive tools, events (money
weeks, savings day), museums, serious games
…complementary to school initiatives
…can reach out-of-school young people
… participation of non-profits and private sector can bring
resources, but also up-to-date experience on financial issues
…needs to be integrated in national strategies
Out of school initiatives
Find out more about our work at www.oecd.org/pisa
– All publications
– The complete micro-level database
Email: [email protected]
Twitter: SchleicherOECD
Wechat: AndreasSchleicher
Thank you