About one in five American 15-year-old students lack basic financial literacy skills

The assessment tests 15-year-old students on their knowledge and understanding of fundamental elements of the financial world—including financial concepts, products, and risks—and their ability to apply what they know to real-life situations involving financial issues and decisions. PISA was developed and organized by the Organization for Economic Cooperation and Development (OECD), an intergovernmental organization made up of 35 mostly industrialized member countries, and is conducted in the United States by NCES.

The average score for U.S. 15-year-olds was unchanged since 2012, the first time the PISA financial literacy assessment was conducted.

"These are fundamental life skills that are absolutely essential for all Americans, but the study shows that many of our students—roughly one-fifth overall—don't have the skills they need to make prudent decisions about their personal finances," said Peggy G. Carr, acting commissioner of NCES. "We also see sizeable gaps between students in the United States. Only 3 percent of students attending lower-income schools, for example, were high performers in financial literacy, compared to 45 percent of students attending higher-income schools. Conversely, 38 percent of students in lower-income schools were low performers, compared to 16 percent in higher-income schools."

The combined average score for four provinces in mainland China—Beijing, Shanghai, Jiangsu, and Guangdong (B-S-J-G)—was the highest average score among the 15 participating education systems. Students in the Flemish Community of Belgium, the seven Canadian provinces (combined score), the Russian Federation, the Netherlands, and Australia also scored higher, on average, than U.S. students.

"PISA shows how our 15-year-olds are performing compared to their peers in a very diverse group of participating systems," Carr said. "And PISA is especially valuable because it is the only nationally representative study in the United States that measures the applied financial literacy skills of young people; these are the skills students need to be prepared for the financial challenges they will encounter as young adults."

Students in Spain, Lithuania, the Slovak Republic, Chile, Peru, and Brazil had lower average scores than students in the U.S. The average U.S. score was comparable to average scores for students in Poland and Italy.

Eight systems (including the U.S.) participated in the PISA financial literacy assessment in both 2012 and 2015, allowing for comparisons of their students' financial literacy across two time points. Between 2012 and 2015, there was no measurable change in the average U.S. financial literacy score. Among the seven other systems that participated in 2012 and 2015, the Russian Federation and Italy showed measurable gains in average scores, while Poland, the Slovak Republic, Australia, and Spain showed measurable declines.

Two U.S. states—Massachusetts and North Carolina—participated in the 2015 financial literacy assessment as international benchmarking systems and received separate scores from the United States.

Massachusetts' average score was higher than the U.S. average score; North Carolina's average score was not measurably different from the U.S. average score. Results for Massachusetts and North Carolina are for public school students only.

Key findings:

AVERAGE SCORES FOR PARTICIPATING SYSTEMS

• Average scores in financial literacy ranged from 566 in B-S-J-G (China) to 393 in Brazil. The U.S. average score was 487.
• The 2015 U.S. average was lower than the average in six education systems (B-S-J-G (China), Belgium (Flemish Community), Canada, the Russian Federation, Netherlands, and Australia), higher than the average in six education systems (Spain, Lithuania, Slovak Republic, Chile, Peru, and Brazil), and not measurably different from the average in two education systems (Poland and Italy). It was not measurably different than the U.S. average score from the previous financial literacy assessment (2012).

TOP PERFORMERS
Students reaching level 5 on the PISA assessment of financial literacy demonstrate that they can apply their understanding of a wide range of financial terms and concepts to contexts that may only become relevant to their lives in the long term.

• In 2015, the percentages of top performing 15-year-old students in financial literacy ranged from 33 percent in B-S-J-G (China) to 1 percent in Peru. In the U.S., 10 percent of 15-year-olds were top performers.
• The U.S. percentage of top performers in 2015 was lower than the OECD average and five education systems (B-S-J-G (China), Belgium (Flemish Community), Canada, Netherlands, and Australia) and higher than eight (Poland, Italy, Slovak Republic, Spain, Lithuania, Chile, Brazil, and Peru). The U.S. percentage of top performers did not differ significantly from that of the Russian Federation.

LOW PERFORMERS

• Students scoring below level 2 on the PISA assessment of financial literacy lack basic financial literacy skills. They do not demonstrate knowledge of common products, terms, and concepts necessary to make financial decisions.
• The percentage of low performing 15-year-old students (those scoring below proficiency level 2) ranged from 9 percent in B-S-J-G (China) to 53 percent in Brazil in 2015. In the United States, 22 percent of 15-year-olds were low performers, which was higher than in the Russian Federation, Canada, Belgium (Flemish Community), and B-S-J-G (China), and lower than in Brazil, Peru, Chile, the Slovak Republic, and Lithuania. The U.S. percentage of low performers did not differ from Australia, Italy, Netherlands, Poland, and Spain.
• The overall U.S. percentage of low performers was higher than in Massachusetts (12 percent), and not measurably different than in North Carolina (19 percent).

U.S. RESULTS BY SOCIOECONOMIC STATUS

• On average, students in the U.S. attending higher-income schools (schools where between 0 and 24.9 percent of students were eligible for the National School Lunch Program) scored 110 points higher than students attending lower-income schools (schools where 75 percent or more of students were eligible for the National School Lunch Program).
• In the U.S., the average score for students attending higher-income schools was 543. The average score for students attending lower-income schools was 433.
• A lower percentage of U.S. students attending lower-income schools were top performers compared to students attending higher-income schools.
• Three percent of students attending lower-income schools were top performers. Forty-five percent of students attending higher-income schools were top performers.
• A higher percentage of U.S. students attending lower-income schools were low performers compared to students attending higher-income schools.
• Thirty-eight percent of students attending lower-income schools were low performers. Sixteen percent of students attending higher-income schools were low performers.

U.S. RESULTS BY RACE/ETHNICITY

• Average scores for U.S. White students (524) and Asian students (525) were higher than the U.S. average. Average scores for U.S. Black students (422) and Hispanic students (460) were lower than the U.S. average.
• In the U.S., 12 percent of White students, 14 percent of Asian students, 18 percent of students of two or more races, 28 percent of Hispanic students, and 41 percent of Black students scored were low performers.
• In the U.S., 20 percent of Asian students, 15 percent of White students, 10 percent of students of two or more races, 5 percent of Hispanic students, and 1 percent of Black students were top performers.

The full report is available at http://nces.ed.gov/surveys/pisa/

The National Center for Education Statistics (NCES), a principal agency of the U.S. Federal Statistical System, is the statistical center of the U.S. Department of Education and the primary federal entity for collecting and analyzing data related to education in the U.S. and other nations. A part of the Institute of Education Sciences, NCES fulfills a congressional mandate to collect, collate, analyze, and report complete statistics on the condition of American education; conduct and publish reports; and review and report on education activities internationally.

Contact: James Elias, (202) 706-7416, [email protected]

SOURCE National Center for Education Statistics

Related Links

https://nces.ed.gov