OECD Multilingual Summaries

PISA 2012 Results: Students and Money (Volume VI)

Financial Literacy Skills for the 21st Century

Summary in English

Finance is a part of everyday life for many 15‑year‑olds: they are already consumers of financial services such as bank accounts with access to online payment facilities. As they near the end of compulsory education, students will also face complex and challenging financial choices. One of their first major decisions may be to choose whether to continue with formal education and how to finance such study.

Financial literacy is thus an essential life skill, and high on the global policy agenda. Shrinking welfare systems, shifting demographics, and the increased sophistication and expansion of financial services have all contributed to a greater awareness of the importance of ensuring that citizens and consumers of all ages are financially literate. Some governments have started developing strategies and policies to improve financial literacy. The financial literacy assessment in PISA 2012 offers the first ever international assessment of the financial knowledge and skills of 15‑year‑old students. A second assessment is planned for PISA 2015, which will make it possible to monitor change and provide further evidence on the design and implementation of policies to enhance financial literacy.

This volume reports the results of the PISA 2012 financial literacy assessment, which was administered to approximately 29 000 students in 13 OECD countries and economies (Australia, the Flemish Community of Belgium, the Czech Republic, Estonia, France, Israel, Italy, New Zealand, Poland, the Slovak Republic, Slovenia, Spain and the United States) and five partner countries and economies (Colombia, Croatia, Latvia, the Russian Federation and Shanghai‑China), representing 40% of world GDP.

There are wide differences in average performance between the highest‑ and lowest‑performing countries and economies: more than 75 score points (a full PISA proficiency level) among OECD countries and economies, and more than 225 score points across all participants. Yet only a small proportion (16%) of the variation among countries’ mean financial literacy scores is explained by per capita GDP.

They can analyse financial products involving features that are not immediately evident, such as transaction costs, solve non‑routine financial problems such as calculating the balance in a bank statement while accounting for transfer fees, and demonstrate an understanding of the wider financial landscape, such as the implications of income‑tax brackets. In contrast, 15% of students, on average, score below the baseline level of performance in the PISA financial literacy scale. At best, these students can recognise the difference between needs and wants, make simple decisions about everyday spending, recognise the purpose of common financial documents, such as an invoice, and apply single and basic numerical operations (addition, subtraction or multiplication) in contexts that they are likely to have encountered personally.

In contrast, in France, Italy and Slovenia, students’ performance in financial literacy is relatively low, on average, when compared with students in all participating countries and economies who have similar proficiency in mathematics and reading. Thus, although financial literacy skills are positively correlated with mathematics and reading skills, high performance in one of those core subjects does not necessarily signal proficiency in financial literacy.

On average, 37% of performance differences in financial literacy within countries are observed between schools – a significant proportion, but smaller than that observed in mathematics and reading.

Estonia is the only participating country that combines above‑average performance with a weaker‑than‑average association between financial literacy performance and socio‑economic status. On average across OECD countries and economies, non‑immigrant students perform slightly better in financial literacy than immigrant students with similar socio‑economic status, language spoken at home, and performance in mathematics and reading. The gap in financial literacy performance between immigrant and non‑immigrant students is larger than the OECD average in the Flemish Community of Belgium, Estonia, France, Slovenia and Spain.

In all participating countries and economies, except Italy, there are no differences in average financial literacy scores between boys and girls. Across OECD countries and economies, there are more top‑performing boys than girls, and more low‑performing boys than girls, in financial literacy.

In 9 out of 13 OECD participating countries and economies, after adjusting for socio‑economic status, students who hold a bank account perform as well as those who do not, while in the Flemish Community of Belgium, Estonia, New Zealand, and Slovenia, students who hold a bank account score higher in financial literacy than students of similar socio‑economic status who do not.

On average across OECD countries and economies, the difference in financial literacy performance between students who agreed with the statement “I like to solve complex problems” and students who disagreed is equal to 31 score points, or almost half a proficiency level.