As a senior secondary school teacher or leader, it’s likely that many of your students have their own bank accounts and debit cards. But how financially literate are they?
Financial literacy is an important life skill that helps students make sound financial decisions. The OECD’s Programme for International Student Assessment (PISA) 2022 included an optional financial literacy assessment which looked at students’ financial knowledge, attitudes and behaviours.
PISA undertook its first financial literacy assessment in 2012, and in 2018, Australia participated. While Australia did not take part in this latest assessment, almost 100,000 students from 14 OECD countries and economies (Austria, the Flemish community of Belgium, 8 Canadian provinces, Costa Rica, Czechia, Denmark, Hungary, Italy, the Netherlands, Norway, Poland, Portugal, Spain and the United States) and 6 partner countries (Brazil, Bulgaria, Malaysia, Peru, Saudi Arabia and the United Arab Emirates) did participate.
The results are published in the report, PISA 2022 Results (Volume IV): How Financially Smart Are Students?, released by the OECD last week. Some results are expressed as averages for the 14 OECD countries and economies, and some are available for all 20 participating countries.
How did students perform?
‘These latest PISA financial literacy results show that while most 15-year-old students are already consumers of financial products and services, many still lack some of the skills and knowledge that are needed to make sound financial decisions for themselves,’ the OECD’s Carmine Di Noia and Andreas Schleicher write in the report.
Seven countries and economies performed above the OECD average in financial literacy: Austria, the Flemish community of Belgium, the Canadian provinces*, Czechia, Denmark*, the Netherlands* and Poland.
When looking at all participating countries, an average of 8% of students were found to be proficient at Level 5, meaning they were top performers in financial literacy. Proficiency at this level means students can analyse complex financial products and solve non-routine financial problems.
It was also found that – in every participating country and economy that had valid data on socio-economic status – advantaged students performed significantly better than disadvantaged students.
As for performance by gender, boys outperformed girls in Austria, Costa Rica, Denmark*, Hungary, Italy and Portugal. Girls outperformed boys in Bulgaria, Malaysia Norway and the United Arab Emirates. In the remaining 10 countries and economies, no significant gender difference was found.
Financial knowledge and performance in mathematics and reading
Student performance in financial literacy was also compared to their performance in the core PISA subjects of reading and mathematics. For all participating countries and economies, it was found that performance in reading and mathematics assessments were highly correlated with performance in financial literacy in PISA 2022.
‘Indeed, being proficient in financial literacy, or being able to manage one’s financial affairs, requires being able to understand a variety of generally written materials related to transactions and contracts. … Likewise, many financial decisions involve the manipulation of quantities of money or to perform basic numerical calculations, which necessarily requires a degree of mathematical literacy,’ the report explains.
Student behaviours towards, and use of, money
Many areas of student behaviours towards money were measured in the assessment.
The results show almost two-thirds of students in the 14 OECD countries and economies (63%) said they hold an account at a bank/financial institution and a similar amount (62%) report holding a payment/debit card. A large proportion of these students (86%) have bought something online in the previous 12 months (either on their own or with a family member). A majority (83%) also said they can independently decide what to spend their money on, and the OECD revealed that these students scored, on average, 30 points higher in the financial literacy assessment than students who did not report doing so.
Staying with the 14 OECD countries and economies and looking at students’ saving behaviours; an overwhelming majority (93%), on average, reported saving money at least once in the previous 12 months. When it comes to spending money, three-quarters of these students (74%) reported comparing prices in different shops before buying something and 60% said they bought something because their friends had it. The report also reveals that, on average, students who performed at Level 4 or 5 were 72% more likely to report having saved money and 50% more likely to report that they compare prices in different shops before buying something, than those at Level 1 or below (after accounting for student characteristics, attitudes and performance in mathematics and reading).
Most students in these 14 countries and economies (64%) also reported talking to their parents weekly or monthly about their own spending decisions. This behaviour, on average, correlated with students scoring 12 points higher in financial literacy than their peers who never speak with their parents about money.
Students’ attitudes towards money
In all participating countries, most students (77%) on average said they felt confident about their ability to manage their money. However, an average of 38% of all participating students said money matters are not relevant to them right now.
Half (51%) of all participating students said they enjoy talking about money matters. The gender gap on this was found to be significant in favour of boys in 16 of the 20 participating countries and economies.
What are students learning about at school?
Students were also asked to self-report on their exposure to financial literacy in school. Among the participating 20 countries and economies, many reported learning about a wage (67%), a budget (64%), or a bank loan (63%) in the last 12 months, and that they still know what these terms mean. Only 28% learnt about return on investment at school and still know what this means, and fewer said the same about compound interest (26%), dividend (26%) and diversification (19%).
As for when they have the opportunity to be exposed to finance-related tasks at school, in the 14 OECD countries and economies, it was most commonly reported to be in mathematics classes (by 44% of students on average), but also in social sciences (30%), economics and business classes (29%), or classes about citizenship (27%).
‘These results show that there are wide variations among students in their financial literacy proficiency, and that students can learn about money matters in a variety of ways: from their parents, families and friends, at school, and from their experience with money and financial products,’ the report reads.
*Caution is required when interpreting estimates for these countries and economies because one or more PISA sampling standards were not met.
References
OECD (2024), PISA 2022 Results (Volume IV): How Financially Smart Are Students?, PISA, OECD Publishing, Paris, https://doi.org/10.1787/5a849c2a-en.
Consider the OECD’s conclusion that while most 15-year-olds are already consumers of financial products and services, many lack some of the skills that are needed to make sound financial decisions themselves.
With a group of colleagues, discuss together any upcoming opportunities in the curriculum to expose students to finance-related tasks. How will these tasks support students’ financial literacy?
