How well do teenagers around the world understand finance? Researchers at the Organization for Economic Co-operation and Development, Paris, set out to find the answer. This month, they unveiled the results of what they claim is the first large-scale global assessment of the financial literacy of young people as part of their Program for International Student Assessment.
Only one in 10 students overall was able to tackle the hardest financial literacy tasks, such as transaction costs and tax implications. Above-average scores were found in Shanghai followed by Belgium-Flemish community, Estonia, Australia, New Zealand, the Czech Republic and Poland. The U.S. ranked just below the median score of 500, coming in at 492.
The OECD has conducted PISA assessments since 2000, but this is the first one to include financial literacy questions that were asked of 29,000 teenagers in 18 countries. The teens, all 15-year-olds, were asked how they deal with monetary transactions, plan and manage finances, understand taxes and savings, view risk and reward, and understand consumer rights and responsibilities in financial contracts.
The questions were designed by George Washington University's Global Financial Literacy Excellence Center in Washington, and the results were unveiled in collaboration with the Department of Education, Department of the Treasury and Consumer Financial Protection Bureau. Country-specific results are available at www.oecd.org/pisa/keyfindings/Snapshot-PISA-2012-finlit-results.pdf. — HAZEL BRADFORD