Students and Money: Highlights from the OECD PISA Financial Literacy Assessment
PISA 2012 Students and Money Financial literacy skills
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OECD EMPLOYER BRAND Playbook 1 PISA 2012 Students and Money Financial literacy skills 9 July 2014 Launch UNDER EMBARGO UNTIL 10AM PARIS TIME ON 9 JULY 2014
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PISA 2012 Students and Money Financial literacy skills. UNDER EMBARGO UNTIL 10AM PARIS TIME ON 9 JULY 2014. 9 July 2014 Launch. Financial literacy : 29 000 students in 18 countries/economies took a two hour paper test on financial literacy, mathematics and reading . PISA in brief. - PowerPoint PPT Presentation
Transcript of PISA 2012 Students and Money Financial literacy skills
OECD EMPLOYER BRANDPlaybook
1
PISA 2012Students and MoneyFinancial literacy skills
9 July 2014Launch
UNDER EMBARGO UNTIL 10AM PARIS
TIME ON 9 JULY 2014
2 PISA in brief
• Over half a million students…– representing 28 million 15-year-olds in 65 countries/economies
… took an internationally agreed 2-hour test…– Goes beyond testing whether students can
reproduce what they were taught…… to assess students’ capacity to extrapolate from what they know
and creatively apply their knowledge in novel situations– Mathematics, reading, science, problem solving, financial literacy
… and responded to questions on…– their personal background, their schools
and their engagement with learning and school• Parents, principals and system leaders provided data on…
– school policies, practices, resources and institutional factors that help explain performance differences .
…“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: 29 000 students in 18 countries/economies took a two hour paper test on financial
literacy, mathematics and reading
3 Why is financial literacy relevant for 15-year-old students?
Big decisions at a young age: e.g. con-tinuing education vs
working
Shrinking welfare systems; increased
personal responsibil-ity
Shifting demograph-ics- increased
longevity
Changing labour-markets and re-
duced job security
Access to financial products at young
ages
Increasingly com-plex financial mar-
kets
Why is financial literacy relevant for 15-year-old students?
4
PolandSlovak Republic
IsraelItaly
CroatiaCzech Republic
LatviaUnited States
Shanghai-ChinaOECD average-13
SpainFlemish Community (Belgium)
FranceAustralia
EstoniaNew Zealand
Slovenia
0 10 20 30 40 50 60 70 80 90 100
Percentage of students with a bank account
% of students with a bank account
5
Shanghai-ChinaPolandIsraelLatvia
United StatesFlemish Community (Belgium)
CroatiaItaly
Slovak RepublicOECD average-10
FranceSlovenia
Russian FederationEstonia
Czech Republic
0 10 20 30 40 50 60 70 80 90 100
Percentage of students with a prepaid debit card
% with a prepaid debit card
%
6
Source: Global Financial Inclusion (Global Findex) Database, World Bank
Young adults are making use of financial tools
Esto
nia
Aust
ralia
Latv
iaUn
ited
Stat
esCz
ech
Repu
blic
Belg
ium
Pola
ndNe
w Ze
alan
dIsr
ael
Slov
ak R
epu.
..Sp
ain
Italy
Slov
enia
Fran
ceRu
ssia
n Fe
d.Ch
ina
Colo
mbi
aCr
oatia
0
20
40
60
80
100Percentage of account holders using electronic
paymentsAge15-24 Age 25-64
7
PISA financial literacy assessment framework
ContentMoney and transactions
Planning and managing finances
Risk and reward
Financial landscape
ProcessesIdentifying financial in-
formation
Analyse information in a financial context
Evaluate financial is-sues
Apply financial know-ledge and understand-
ing
ContextsEducation and work
Home and family
Individual
Societal
7
8
Sara receives this invoice in the mail
Sample Question: INVOICE
This is an easy item – Level 1 on the financial literacy scale (below baseline)
Question 1: Why was this invoice sent to Sarah?A. Because Sarah needs to pay the money to Breezy Clothing.B. Because Breezy Clothing needs to pay the money to Sarah.C. Because Sarah has paid the money to Breezy Clothing.D. Because Breezy Clothing has paid the money to Sarah.
9
NEW OFFERMrs Jones has a loan of 8000 zeds with FirstZed Finance. The annual interest rate on the loan is 15%. Her repayments each month are 150 zeds. After one year Mrs Jones still owes 7400 zeds. Another finance company called Zedbest will give Mrs Jones a lona for 10 000 zeds with an annual interest rate of 13%. Her repayments each month would also be 150 zeds
NEW OFFER- Question 1. If she takes the Zedbest loan, Mrs Jones will immediately pay off her existing loan.What are two other financial benefits for Mrs Jones if she takes the Zedbest loan?1. …………………………………………………………………………………………………2. …………………………………………………………………………………………………
Sample Question: NEW OFFER
This is a hard item – Level 5 on the scale (top performers)
She will be paying lower interestsShe will have more money available
How well prepared are young people to make complex financial decisions that may have an
impact on the rest of their lives?
1010
Strong performance in financial literacy
Low performance in financial literacy
Average performanceof 15-year-olds in
financial literacyFigure VI.2.2
11
375
385
395
405
415
425
435
445
455
465
475
485
495
505
515
525
535
545
555
565
575
585
595
605 Shanghai-China
Flemish Community (Belgium)
EstoniaAustraliaNew Zealand
Czech Republic PolandLativa
United StatesFrance Russian FederationSlovenia Spain CroatiaIsrael
Slovak Republic Italy
Colombia
Chart TitleMean score
15%
23%
30%
22%
10%
Series2
Distribution of performance
Level 5
Level 4
Level 3
Level 2
Level 1 or below
Financial literacyPerformance
levels
Top performers
Baseline
Students can apply their understanding of a wide range of financial terms and con-cepts to contexts that may only become relevant to their lives in the long term.
They can analyse complex financial products and can take into account features of financial docu-
ments that are significant but unstated or not immediately evident, such as trans-action costs. They can work with a high level of accuracy and solve non-routine fi-nancial problems, and they can describe the potential outcomes of financial deci-
sions, showing an understanding of the wider financial landscape, such as income tax.
Students can identify common financial products and terms and interpret informa-tion
relating to basic financial concepts. They can recognise the difference between needs and
wants and can make simple decisions on everyday spending. They can recognise the
purpose of everyday financial documents such as an invoice and apply single and basic
numerical operations (addition, subtraction or multiplication) in financial contexts that they are likely to have experienced personally.
12
15%
23%
30%
22%
10%
Series2
Distribution of performance
18%
26%
27%
19%
9%
Series2
Level 5
Level 4
Level 3
Level 2
Level 1 or below
Financial literacyperformance
levels
Top performers
Baseline
13
Distribution of performance
18%
26%
27%
19%
9%
Series2
Level 5
Level 4
Level 3
Level 2
Level 1 or below
Financial literacyperformance
levels
Top performers
Baseline
14
2%
5%
19%
32%
43%
Series2
What is the share of top performers?
15
In most countries and economies, boys are more likely to be top performers than girls, despite similar average levels of performance for
boys and girls.
15
16
Shan
ghai
-Chi
na 4
1.2
Fl.Co
m. (
Belg
ium
) 16
.7
New
Zeal
and
15.
4
Aust
ralia
11.
7
Esto
nia
9.5
Czec
h Re
publ
ic 7
.5
OECD
ave
rage
-13
7.9
Unite
d St
ates
7.3
Israe
l 6.
7
Fran
ce 7
.1
Pola
nd 6
.4
Slov
enia
5.2
Slov
ak R
epub
lic 4
.6
Latv
ia 3
.9
Russ
ian
Fede
ratio
n 2
.6
Spai
n 2
.5
Croa
tia 3
.1
Italy
1.8
Colo
mbi
a 0
.4
05
101520253035404550
Top performers… among boys… among girls
Top performers in financial literacy, by gender Tab V.4.6
Boys are more likely to be top performers than girls, particularly in New Zealand, Israel, Poland, France and the Flemish Community (Belgium)
Percentage of top performers
in financial literacy and at least
in one other domain
10% of students are top performers in financial literacy(OECD average): they can solve problems such as sample task NEW OFFER– and possibly harder problems as well
Sha
ngha
i-Chi
na
Est
onia
Flem
ish
Com
mun
ity (B
el...
Latv
ia
Pol
and
Cze
ch R
epub
lic
Aus
tralia
OE
CD
ave
rage
-13
New
Zea
land
Cro
atia
Spa
in
Rus
sian
Fed
erat
ion
Slo
veni
a
Uni
ted
Sta
tes
Fran
ce
Italy
Slo
vak
Rep
ublic
Isra
el
Col
ombi
a
0
5
10
15
20
25
30
35
40
45
50
55
60
65 Low performers … among boys … among girls%
Percentage of low-performing studentsin financial literacy
Tab V.2.117
Boys are more likely to be low performers than girls, particularly in France, Israel, Slovenia and the Slovak Republic
Across the OECD on average, 15% of students do not reach the baseline level of financial literacy – meaning that they can solve only simple tasks such as sample task INVOICE (if any)
Skill gaps within countriesCo
lom
bia
Israe
l
Slov
ak R
epub
lic
Fran
ce
Italy
New
Zeal
and
Unite
d St
ates
Slov
enia
Russ
ian
Fede
ratio
n
Spai
n
OECD
ave
rage
-13
Croa
tia
Aust
ralia
Czec
h Re
publ
ic
Pola
nd
Latv
ia
Flem
ish C
omm
unity
(Bel
g...
Esto
nia
Shan
ghai
-Chi
na
190
290
390
490
590
69095%90%75%50%25%10%5%
Top
Bottom
Countries ranked by 10th percentile of financial literacy performance
18
How does financial literacy relate to mathematics and reading?
How strongly does performance in financial literacy relate to performance in other domains? How much of the differences
in financial literacy can be explained by differences in mathematics and reading performance?
19
-30
-20
-10
0
10
20
30Fr
ance
Italy Slo
veni
a
Isra
el
Col
ombi
a
Sha
ngha
i-Chi
na
Latv
ia
Uni
ted
Sta
tes
OE
CD
ave
rage
-13
Cro
atia
Pol
and
Slo
vak
Rep
ublic
Spa
in
Est
onia
Flem
ish
Com
mun
ity
(Bel
gium
)
New
Zea
land
Rus
sian
Fed
erat
ion
Aus
tralia
Cze
ch R
epub
lic
%
Relative performance in financial literacy
Students' performance in financial literacy is
lower than their expected performance
Students' performance in financial is higher than their
expected performance
20
Taking performance in math-ematics and reading into ac-count
200 300 400 500 600 700 800200
300
400
500
600
700
800
Patterns of relative performance in financial literacy
Financial literacy performance relative to mathematics performance
Mathematics performance
Average relationship between financial
literacy and mathematics performance
Australia performs better-than-expected in financial literacy. The difference between observed and expected
performance is larger among strong performers in mathematics
The Czech Republic perform better-than-expected in financial literacy. The difference between
observed and expected performance is larger among low
achievers in mathematics France’s performance is lower-than-expected in financial literacy. The gap
between observed and expected performance is similar at all levels of
mathematics performance.
21
Italy’s performance is lower-than-expected in financial literacy. The
gap between observed and expected performance is wider
among high achievers in mathematics.
Students in Israel perform as expected in financial literacy at
all levels of mathematics performance
How are learning opportunities distributed?
2222
23
Est
onia
Italy
Rus
sian
Fed
erat
ion
Cro
atia
Aus
tralia
Fl.C
om. (
Bel
gium
)
Pol
and
Sha
ngha
i-Chi
na
Col
ombi
a
Latv
ia
Cze
ch R
epub
lic
OE
CD
ave
rage
-13
Isra
el
Spa
in
Fran
ce
Slo
veni
a
Uni
ted
Sta
tes
Slo
vak
Rep
ublic
New
Zea
land
0
2
4
6
8
10
12
14
16
18
20
Financial literacy Mathematics Reading
Per
cent
age
of v
aria
tion
in p
erfo
rman
ce
expl
aine
d by
soc
io-e
cono
mic
sta
tus
Relationship between socio-economic status and performance in financial literacy, mathematics and reading
Figure VI.3.6
What can be done to enhance financial literacy
Improving the quantity/quality of teaching of……conceptual foundations of math ?
…applied math ?…financial literacy as a cross-curricular domain ?
…financial literacy education as a separate subject ?…other types of education?
…or is it all about out-of-school experiences?
Slov
ak R
epub
licLa
tvia
Italy
Croa
tia
Israe
lSh
angh
ai-C
hina
Czec
h Re
publ
ic
Spai
nUn
ited
Stat
esAu
stra
lia
Pola
ndFr
ance
OECD
ave
rage
-13
Esto
nia
Fl.Co
m. (
Belg
ium
)
Slov
enia
New
Zeal
and-25
-15-55
15253545556575
Financial literacy by bank account holding (accounting for socio-demographic status)
Table VI.4.2625
On average across OECD countries and economies, students who hold a bank account score 21 points higher than students with similar socio-economic status who do not.
Spain
Eston
iaIsr
ael
Slove
nia
Croatia Ita
lyFra
ncePo
land
Colombia
Shan
ghai-
China
OECD av
erage
-13
Russian
Fede
ration
United
State
s
New Ze
alandLat
via
Austr
alia
Fl.Com
. (Belg
ium)
Czech R
epub
lic
Slova
k Rep
ublic
0102030405060708090
100
Not available Available < 2 years Available ≥ 2 years
Student exposure to financial education 26
Exposure and financial literacyPe
rfor
man
ce in
fina
ncia
l lit
erac
y27
40 50 60 70 80 90 100375
425
475
525
575
625
526
379
513
541
501
520
500510
486
603
470
492
% of students in schools where the principal reports that financial literacy is available for at least 2 years
Esto
nia
Shan
ghai
-Chi
na
Fl.C
om. (
Belg
ium
)
Croa
tia
Latv
ia
Russ
ian
Fede
ratio
n
Pola
nd
Czec
h Re
publ
ic
Italy
Slov
ak R
epub
lic
Spai
n
Israe
l
OECD
ave
rage
-13
Slov
enia
Aust
ralia
Colo
mbi
a
Fran
ce
New
Zeal
and
Unite
d St
ates
0102030405060708090
Score-point difference: Students who disagree minus students
who agree with the statement "When confronted with a problem, I give up easily"
Attitude such as perseverance matters 28
Colo
mbi
a
Czec
h Re
publ
ic
Pola
nd
Isra
el
Flem
ish C
omm
unity
(Bel
gium
)
Shan
ghai
-Chi
na
Croa
tia
Italy
Slov
ak R
epub
lic
Latv
ia
OECD
ave
rage
-13
Spai
n
Russ
ian
Fede
ratio
n
Aust
ralia
Esto
nia
Unite
d St
ates
Slov
enia
Fran
ce
New
Zea
land
-100
1020304050
Statistically significant Not statistically significant 2
Openness to problem solving is also important
Score-point difference: Students who agree minus stu-dents who
disagree with the statement "I like to solve complex prob-lems"
29
Thank you !
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