First OECD PISA financial literacy test finds many young people confused by money matters
Around one in seven students in the 13 OECD countries and economies that took part in the first OECD PISA international assessment of financial literacy are unable to make even simple decisions about everyday spending, and only one in ten can solve complex financial tasks.
Some 29 000 15 year-olds in 18 countries and economies* took part in the test, which assessed the knowledge and skills of teenagers in dealing with financial issues, such as understanding a bank statement, the long-term cost of a loan or knowing how insurance works.
“Developing financial literacy skills and knowledge is critical now that individuals are becoming increasingly responsible at an ever earlier age for financial risks affecting their future,” said OECD Secretary-General Angel Gurría, launching the report in Paris with H.M. Queen Máxima of the Netherlands, UN Secretary General’s Special Advocate for Inclusive Finance for Development and Honorary Patron of the G20 Global Partnership on Financial Inclusion.
“Some governments have started developing strategies and policies so that people have the skills they need throughout their lives,” he said. “More need to move this up the policy agenda so that citizens are prepared for an ever-more complicated financial world.” (full speech of OECD Secretary-General)
Shanghai-China had the highest average score in financial literacy, followed by the Flemish Community of Belgium, Estonia, Australia, New Zealand, the Czech Republic and Poland.
The gender gap in financial literacy was much smaller than in OECD PISA tests in maths or reading, with there being no significant difference between the performance of boys and girls, except in Italy.
But the inequality gap mirrors that in key school subjects: more socio-economically advantaged students scored much higher than less-advantaged students on average across participating OECD countries and economies. Non-immigrant students also performed slightly better than immigrant students from a similar socio-economic status. The gap between the two groups is larger than the OECD average in the Flemish Community of Belgium, Estonia, France, Slovenia and Spain.
The survey also revealed that skills in mathematics and reading are very closely related to financial literacy. However, high proficiency in one of these subjects does not always signal strong performance in financial literacy.
Similarly, countries that perform well in maths or reading also perform well in financial literacy. But Australia, the Czech Republic, Estonia, the Flemish Community of Belgium and New Zealand score slightly higher in financial literacy than predicted by their performance in maths and reading. Conversely, students in France, Italy and Slovenia perform slightly worse in financial literacy than predicted. The results are inconclusive about the best approach to improve financial literacy at this stage. The OECD is developing more research to address this question in the future.
* Participating countries and economies: Australia, Belgium (Flemish Community), Shanghai-China, Colombia, Croatia, Czech Republic, Estonia, France, Israel, Italy, Latvia, New Zealand, Poland, Russia, Slovak Republic, Slovenia, Spain and United States.