Yesterday the PISA Finance for Life Congress began to be held in Madrid, of which you have more information on this link; during its course reflections are made about financial competition in teenagers, and the PISA report specially prepared to analyze the acquisition of said competence has been submitted.
Tell them that if you are interested, you can follow the session today in Streaming (after 9.30). But the objective of this post is to present the most recent documents that reflect the results of the evaluation of financial competence, in a comparison between 15-year-old students from 18 OECD countries. It is the first international study of this type.
According to PISA, financial competence is 'knowledge and understanding of financial concepts and risks, and skills / motivation / confidence, to apply such knowledge and understanding'. This will allow young people, make effective decisions in different financial contexts, to improve the financial well-being of individuals and society, and allow their active participation in economic life.
It seems that math and reading skills are linked to financial, Although a high domain one of these core subjects, does not have to mean a high performance in financial competition. There are countries such as Australia, Belgium or the Czech Republic, which score better in financial competition than would be expected to judge by their performance in mathematics and reading; while others such as France, Italy and Slovenia, based on their performance in mathematics and reading, perform worse in financial competition.
On average in all participating OECD countries and economies, a socio-economically more successful student earns 41 more points in financial knowledge than a less advantaged student. For example, in Shanghai (China) family wealth is more strongly associated with financial competition than performance in mathematical competence
Performance in financial competition between participating countries and regionsPrepare to acquire financial competence
Countries address the goal of preparing students in very different ways for an increasingly complex financial world.
Some countries have begun to introduce financial knowledge into the school curriculum; others focus directly on reinforcing students' conceptual understanding in key areas, such as mathematics, and then expect their students to be able to apply that understanding to different contexts, including financial ones. The fact that the latter group includes those who have obtained the highest performance (Shanghai), demonstrates that the question of how to develop financial knowledge remains open to debate.
Now is a good time to rethink the introduction of these concepts in the school curriculum, since there are now more complex financial products and services, in addition to the fact that young people will probably have to make more financial decisions in the future than their parents. It is relatively common for students to complete products such as bank accounts, Internet payment services, or prepaid mobile phone at the end of compulsory education. In addition, some should review the options to continue studying if they wish, and participate with their families in reviewing options to pay for studies.
Financial competition and how is that measured?
PISA assessments take into account the following parameters: knowledge and understanding of financial concepts and risks; skills, motivation and self-confidence to apply them to decision making in all monetary contexts; training to participate actively in economic life, with the aim of improving the state of society.
In particular, the knowledge and skills regarding:
- Treatment of money
- Realization of economic transactions.
- Use of financial instruments (bank cards, checks, bank accounts and currencies).
- Planning and budget management.
- Ability to identify and manage risks.
- Knowledge of the rights and responsibilities of consumers, of the consequences of certain activities.
In the participating OECD countries and economies, Only one in ten students reaches the highest level of financial proficiency at PISA 2012. These students can solve non-routine financial problems, such as calculating the balance of a bank statement, taking into account factors such as transfer fees, and can demonstrate an understanding of the broader financial landscape, including the implications of the tax tranches .
On average, 247 points separate 10% of students with the best performance from 10% with the lowest performance; in Australia and the Flemish community of Belgium, the difference exceeds 250 points, while in New Zealand it exceeds 305 points
Relative performance in financial competition
PISA 2012: what was the assessment of financial competition
Financial competence was assessed by a 60-minute printed test. In addition, students took another 60-minute test that combined math and reading comprehension. The test questions they could be multiple choice and constructed response. The questions can be consulted here.
The students who did the financial evaluation also answered a questionnaire about themselves, their families, their institute and their learning. In addition, they answered questions about their experience in money matters.
School principals answered a questionnaire about school management, learning environment and financial education issues in the school environment.
In the same centers participating in PISA, an additional sample of eight 15-year-old students was randomly chosen to take the financial test. Some 29,000 students passed this approval in 2012, representing nine million 15-year-olds from schools in 18 participating countries or economies
In Spain, there were 1,108 students who took the financial test in 179 schools.
And since we talk about Spain ...
The performance of Spain in financial competition It is below the average of the 13 OECD countries that participated in the study. One in six Spanish students (16.5% compared to 15.3% on average OECD) does not reach the basic level of performance in financial competition. This indicates that, at best, they are able to recognize the difference between what is needed and what is wanted, of making simple decisions about everyday spending, and of recognizing what current financial documents are for, such as an invoice. Only 3.8% of students are at the level of excellence (compared to an average of 9.7% in the OECD).
In general, comparing their results in financial and mathematics, Spanish students perform as expected. But nevertheless, the best in math and reading do not perform in financial competition as well as would be expected.
In Spain, socio-economic origin is associated more with financial performance than with mathematics performance; In most participating countries, however, this does not happen. But The strong relationship between socio-economic origin and financial performance is similar to that of the OECD average.
Almost 60% of our students have an open bank account, and they are the ones who get the best results in financial competition; but this gap disappears by taking into account the socio-economic status of the students.
While most 15-year-old students receive money as a gift from their relatives and friends (83% compared to 84% of the OECD average), very few earn money by other means, such as working outside school hours, doing housework or Receive a periodic assignment without doing any homework in return.
The level of financial competence of Spanish students is below the OECD average. This is mainly due to the lower percentage of students with a high level of financial competence.
I still have to comment that although PISA has consistently demonstrated a difference by gender in performance in mathematical and reading skills, in 17 of the 18 countries and economies that have participated in the evaluation of financial knowledge, this difference between the average scores of boys and girls in financial knowledge. But nevertheless, among students with comparable performance in math and reading skills, boys get better performance than girls in 11 of the 18 countries and economies that participated in the test.
Images | COD Newsroom, PISA More information | PISA in Focus, OECD, Ministry of Education, Culture and Sports in Peques and More | MyBnk is a charity that offers financial education to children in schools. The initiative to introduce financial education into Spanish secondary classes is approved
