PISA 2015 Results Volume IV : Students' Financial Literacy

Abstract

Financial literacy is now globally recognised as an essential life skill. Globalisation and digital technologies have made financial services and products more widely accessible and at the same time more challenging. Many young people face financial decisions and are already consumers of financial services, from bank accounts to prepaid debit cards. Financial education is acknowledged as a complement to financial consumer protection, inclusion and regulation, as a way to improve individual decision making and well-being, and to support financial stability and inclusive growth. The PISA financial literacy assessment provides a picture of 15-year-olds’ ability to apply their accumulated financial knowledge and skills to real-life situations involving financial issues and decisions. Beijing-Shanghai-Jiangsu-Guangdong (China), the Flemish Community of Belgium, the participating Canadian provinces (British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and Prince Edward Island), the Russian Federation, the Netherlands and Australia, in descending order of mean performance, have mean scores above the OECD average. On average across the 10 participating OECD countries and economies, 22% of students – or more than 1.2 million 15-year-old students – score below the baseline level of proficiency in financial literacy (Level 2). Students performing at this level can, at best, recognise the difference between needs and wants, can make simple decisions on everyday spending, and can recognise the purpose of everyday financial documents, such as an invoice. Some 12% of students score at Level 5 – the highest level of proficiency. These students make complex financial decisions that will be relevant to them in the future. They can describe the potential outcomes of financial decisions and show an understanding of the wider financial landscape, such as income tax. Students who do well in financial literacy are likely to perform well in the PISA reading and mathematics assessment too, and students who have poor financial literacy skills are likely to do poorly in the other core PISA subjects. But on average across the 10 participating OECD countries and economies, around 38% of the financial literacy score reflects factors that are not captured by the PISA reading and mathematics assessments, and are thus unique to financial skills.