American 15-year-old students show no progress since 2012 in learning financial literacy skills

More 15-year-olds in the U.S. say they learn about money matters outside of school than in school

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National Center for Education Statistics

May 07, 2020, 03:00 ET

WASHINGTON, May 7, 2020 /PRNewswire/ -- Results from the most recent Program for International Student Assessment (PISA) released today by the National Center for Education Statistics (NCES) show that U.S. 15-year-olds have shown no improvement in their understanding of personal finance fundamentals. The score for U.S. students was unchanged since the last time the financial literacy assessment was conducted in 2015 and since the first financial literacy assessment in 2012.

"At a moment when Americans are facing tough financial decisions, we are reporting that we aren't making progress preparing students for the realities of economic life as an adult in the modern age," said Peggy G. Carr, associate commissioner of assessments for NCES. "These are fundamental life skills that are absolutely essential for all Americans, but the study shows that many of our 15-year-olds—roughly one-fifth overall—don't have the skills they need to make prudent decisions about their personal finances and struggle with everyday tasks, like determining the best value between two products at the market and knowing how to respond to a phishing email that looks like it's coming from their bank."

In the United States, the gap between high performers and low performers, as determined by the 90^th and 10^th percentiles, was larger than the average gap in U.S. peer economies that are members of the Organization for Economic Cooperation and Development. U.S. White and Asian students scored higher than the country's average, and black and Hispanic students scored below the U.S. average.

The assessment measures 15-year-old's 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.

"The PISA financial literacy assessment is especially valuable because it is the only nationally representative study in the United States that measures the applied financial literacy skills of the country's 15-year-olds and whether students have the skills they need to be prepared for the variety of financial challenges they will encounter in life as young adults," said Carr. "Whether they go on to college or directly into the workforce after graduation, as young adults they will need to deal with budgeting and saving."

In 2018, 20 education systems participated in the PISA financial literacy assessment, 13 of which were OECD members. Estonia had the highest average score among the participating countries. Students in Finland, Canada, and Poland also scored higher, on average, than U.S. students.

The average U.S. score was comparable to scores for students in Australia, Portugal, Latvia, and Lithuania. The U.S. score was also not significantly different from the average score of OECD member countries.

Students in the Russian Federation, Spain, the Slovak Republic, Italy, Chile, Serbia, Bulgaria, Brazil, Peru, Georgia, and Indonesia had lower average scores than students in the U.S.

Students who take the PISA financial literacy assessment also answer a background questionnaire about their experiences learning about money matters. The data from this questionnaire provides valuable context into the results of the assessment.

In 2018, U.S. 15-year-olds reported learning about personal finance fundamentals outside of school more than in school. Fifty-two percent reported learning about money matters in an activity outside of school, and 46 percent of students or fewer said they learned about such subjects in school. Of the options listed in the questionnaire, the most popular sources that these students consulted for financial information were their parents or the internet.

"Parents were far and away the most frequent source of information about money matters and personal finance, with 96 percent of students saying they learned about these topics from their parents," said Lynn Woodworth, NCES commissioner. "However, there are some indications that students aren't having very deep discussions about important financial issues with their parents. Fifteen-year-olds were more likely to say that they did not speak to family about "big picture" money matters, such as economic news or the family budget. The novel coronavirus pandemic presents a unique and real-world relevant opportunity for parents to begin having those discussions about personal finance fundamentals with their child."

PISA was developed and organized by the Organization for Economic Cooperation and Development (OECD), an intergovernmental organization made up of 37 mostly industrialized member countries, and is conducted in the United States by NCES. The financial literacy assessment is an optional component of PISA that NCES administers in the U.S. with additional funding from the Consumer Financial Protection Bureau (CFPB). Results from the PISA 2018 main study—which assessed 15-year-olds' performance in reading, math, and science literacy—were released in December 2019.

Key findings:

Average Scores for Participating Systems

The 2018 U.S. score was lower than the average in four education systems (Estonia, Finland, Canada, and Poland), higher than the average in eleven education systems (the Russian Federation, Spain, the Slovak Republic, Italy, Chile, Serbia, Bulgaria, Brazil, Peru, Georgia, and Indonesia), and not measurably different from the average score in four education systems (Australia, Portugal, Latvia, and Lithuania). It was not measurably different from the U.S. average score from the previous financial literacy assessment (2015) or the first financial literacy assessment (2012).
Average scores in financial literacy ranged from 547 in Estonia to 388 in Indonesia. The average score of U.S. 15-year-olds was 506. This score was not measurably different from the OECD average of 505.

High Performers
Students who reach level 5 proficiency (a score of 625 or higher) on the PISA financial literacy can apply their understanding of a wide range of financial terms and concepts, including complex ones, to contexts that may only become relevant to their lives in the long term.

In 2018, the percentages of high-performing 15-year-old students (those scoring at or above level 5 proficiency) in financial literacy ranged from 20 percent in Finland to zero percent in Indonesia. In the U.S., 12 percent of 15-year-olds reached level 5 proficiency. On average, 10 percent of students from OECD countries were high performers.
The U.S. percentage of high performers in 2018 was not measurably different than the OECD average percentage and two education systems (Australia and Poland). It was lower than the percentage in three education systems (Finland, Estonia, and Canada) and higher than 14 education systems (Portugal, Lithuania, the Slovak Republic, the Russian Federation, Latvia, Spain, Italy, Chile, Serbia, Bulgaria, Brazil, Peru, Georgia, and Indonesia).

Low Performers
Students scoring below level 2 (below 400) on PISA financial literacy are not yet able to apply their knowledge to real-life situations involving financial issues and decisions.

In 2018, the percentage of low-performing 15-year-old students (those scoring below level 2 proficiency) ranged from five percent in Estonia to 57 percent in Indonesia. In the U.S., 16 percent of participating students were considered low performers, which was lower than the percentages in nine participating countries (the Slovak Republic, Italy, Chile, Serbia, Bulgaria, Brazil, Peru, Georgia, and Indonesia) and higher than the percentages in five participating countries (Estonia, Canada, Finland, Poland, and Latvia). The U.S. percentage of low performers did not differ from Lithuania, Portugal, the Russian Federation, Spain, and Australia.
The U.S. percentage of low performers in 2018 was not statistically different from the average percentage of low performers from OECD countries, which was 15 percent.

U.S. Results by Socioeconomic Status
PISA measures levels of poverty in participating students by using a variable based the percentage of students in schools eligible for free or reduced-priced lunch (FRPL).

In 2018, students in the U.S. attending schools with lower levels of poverty (schools where between 0 and 24.9 percent of students were eligible for FRPL) scored significantly higher than students attending schools with higher levels of poverty (schools where 75 percent or more of students were eligible for FRPL)

U.S. Results by Race/Ethnicity

In the U.S., average scores for White students (532) and Asian students (554) was higher than the U.S. average score.
Average scores for Black students (446) and Hispanic students (475) were lower than the U.S. average score.

The full report is available at https://nces.ed.gov/surveys/pisa/pisa2018

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.

The Program for International Student Assessment (PISA), first implemented in 2000, is an international assessment that measures the performance of 15-year-old students in reading literacy, mathematics literacy, and science literacy. PISA 2018 was the seventh cycle of the assessment. Target populations for PISA include all 15-year-olds in education institutions with grade 7 or higher, regardless of the type of education institution or whether it is publicly or privately funded. Students could be excluded for functional or intellectual disabilities or limited proficiency in the test language. The U.S. sample included both public and private schools, randomly selected and weighted to be representative of the nation's 15-year-old students.

PISA was developed and organized by the Organization for Economic Cooperation and Development (OECD). The OECD is an intergovernmental organization made up of 37 mostly industrialized member countries like the United States, Japan, Germany, the Republic of Korea, and the United Kingdom.