Adele Atkinson - 2014 Conference on Global and European Trends in Financial Education in Istanbul

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This presentation by Adele Atkinson was made during session 4 at the High-level Conference on Global and European Trends in Financial Education held on 22-23 May 2014 in Istanbul, which explored the …

This presentation by Adele Atkinson was made during session 4 at the High-level Conference on Global and European Trends in Financial Education held on 22-23 May 2014 in Istanbul, which explored the role(s) of the private and not-for-profit sectors in financial education, financial literacy and innovation for young people and financial education for migrant workers and their families. Find out more at http://www.oecd.org/daf/fin/financial-education/2014-conference-global-european-trends-financial-education.htm

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  • 1. OECD TOOLS TO MEASURE FINANCIAL LITERACY AND IDENTIFY CORE COMPETENCIES Adele Atkinson, PhD Policy Analyst Financial Education and Consumer Protection Unit High-level conference on global and European trends in financial education 22-23 May 2014 - Istanbul, Turkey
  • 2. • Measuring Financial Literacy – OECD/INFE measurement tool (use supported by G20 leaders in 2013)+ used in international measure in 2010; second one planned for 2015 – OECD PISA financial literacy assessment (future participation encouraged by G20 leaders 2013 and APEC leaders in 2012) • Development of an international core- competency framework for youth (draft expected to be presented to G20 leaders in September 2014) 2 Outline
  • 3. Behaviour 9 Q Keeping track of money Making ends meet Choosing and using products Short and long term planning Knowledge 8 Q Simple and compound interest Inflation- time value of money Risk and return Risk diversification Attitudes 4 Q Propensity to save vs spend Time preference (present vs future) Risk preference (explanatory variable) Financial inclusion Awareness of products Holding and using products Savings habits Socio- demographic information Age Gender Education Work Income 3 Questionnaire content
  • 4. Knowledge Maximum of 8 points (High score 6+) Behaviour Maximum of 9 points (High score 6+) Attitudes Maximum of 5 points High score is >3 2 combined measures 1) Overall score Maximum 22 2) Number of high scores 4 Analysis of financial literacy scores
  • 5. 5 % with high financial knowledge score 45% 46% 57% 61% 58% 69% 60% 51% 40% 41% 49% 33% 53% 57% Albania Armenia CzechRepublic Estonia Germany Hungary Ireland Malaysia Norway Peru Poland SouthAfrica UnitedKingdom BVI
  • 6. 6 % with high financial behaviour score 39% 41% 48% 27% 67% 38% 57% 67% 59% 60% 43% 43% 51% 71% Albania Armenia CzechRepublic Estonia Germany Hungary Ireland Malaysia Norway Peru Poland SouthAfrica United Kingdom BVI
  • 7. 7 % with positive attitudes 69% 11% 62% 46% 63% 69% 49% 53% 57% 71% 27% 54% 49% 67% Albania Armenia CzechRepublic Estonia Germany Hungary Ireland Malaysia Norway Peru Poland SouthAfrica UnitedKingdom BVI
  • 8.  An international measure of financial literacy of youth  2012: Participation (voluntary) in 18 jurisdictions: Australia, Belgium (Flemish), China-Shanghai, Colombia, Croatia, Czech Republic, Estonia, France, Israel, Italy, Latvia, New Zealand, Poland, Slovak Republic, Slovenia, Spain, Russia, and USA • Data on levels of financial literacy by – country/economy – maths/reading score – socio-demographics – experience with money To be repeated in 2015 PISA cognitive assessment of 15-year-olds’ financial literacy
  • 9. The PISA financial literacy assessment framework: processes, content and context Processes: mental strategies or cognitive approaches  Identify financial information  Analyse information in a financial context  Evaluate financial issues  Apply financial knowledge and understanding Content: areas of knowledge and understanding  Money and transactions  Planning and managing finances  Risk and rewards  Financial landscape Contexts: applicable situations  Education and work  Home and Family  Individual  Societal
  • 10. Level 1  Level 2  Level 3 Level 4 Level 5  Described proficiency scale Level 2 is the baseline: i.e. minimum level necessary for 15-year-old students to participate effectively and productively in society. Students who fail to reach this level will struggle to perform basic financial tasks in real life. Level 5 students 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. (OECD 2014, forthcoming)
  • 11. • Building on various resources: – OECD/INFE work on financial education in schools – PISA financial literacy assessment framework – PISA analysis and described proficiency scale – National learning and assessment frameworks – Expert knowledge and feedback from INFE members • Describing expected level of knowledge; • awareness of key content; and • behaviours and attitudes towards applying these in real life situations An international core-competency framework, describing expected outcomes
  • 12. • The availability of tools to measure financial literacy among adults and youth makes it possible to: – Described levels of financial literacy – Compare across countries/groups/policies – Identify changes over time • Expert judgment and robust analysis can identify proportions with sufficient financial literacy • In-depth study can provide a description of core competencies and the order in which they are developed Conclusion
  • 13. Questions? Comments? Interested in participating in the 2015 adult financial literacy measure? Please contact: adele.atkinson@oecd.org OECD/INFE financial education publications and International Gateway www.financial-education.org Thank you