Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results...

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Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington DC Andreas SCHLEICHER

Transcript of Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results...

Page 1: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

Students’ financial literacy:

results from PISA 2015

Wednesday 24 May 2017

Financial Literacy and Education

Commission

Washington DC

Andreas SCHLEICHER

Page 2: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

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

Page 3: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

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

Page 4: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

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

Page 5: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

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

Page 6: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

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%

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:

Page 7: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

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(C

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Austr

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%

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

Page 8: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

• 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

Page 9: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

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

Page 10: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

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

Page 11: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

300

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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

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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

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pro

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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

in financial literacy than disadvantaged students, on average

across the OECD, equivalent to almost three school years

Table IV.4.11

Mean score, by quarters of the PISA index of economic, social and cultural status (ESCS)

In math 15-year-old Americans rank 30th out

of 35 OECD countries

Page 12: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

Financial literacy skills is more than reading and math

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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

Page 13: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

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

Page 14: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

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

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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

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• 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

Page 16: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

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.

Page 17: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

Financial literacy and student motivation

0

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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

Page 18: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

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

Page 19: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

• 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

Page 20: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

• 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

Page 21: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

• 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

Page 22: Students’ financial literacy: results from PISA 2015...Students’ financial literacy: results from PISA 2015 Wednesday 24 May 2017 Financial Literacy and Education Commission Washington

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