PISA and Financial Literacy: Assessing Global Understanding

The Programme for International Student Assessment (PISA), conducted by the Organisation for Economic Co-operation and Development (OECD), is a triennial international survey that evaluates the educational systems of participating countries by testing the skills and knowledge of 15-year-old students in reading, mathematics, and science. Beyond these core subjects, PISA has also assessed financial literacy in selected cycles, providing valuable insights into the financial capabilities of young people worldwide.

PISA’s financial literacy assessment aims to measure students’ ability to apply their knowledge and understanding of financial concepts and risks, and to possess the skills, motivation and confidence to make responsible and effective decisions to improve their financial well-being. This includes understanding basic financial concepts like interest rates, inflation, and diversification, as well as the ability to apply these concepts in real-world scenarios, such as budgeting, saving, and making informed investment choices.

The assessment goes beyond rote memorization, emphasizing the practical application of knowledge. Students are presented with realistic financial situations and are asked to make decisions based on the information provided. This approach allows PISA to gauge not only what students know, but also how they use that knowledge to navigate financial challenges. The assessment covers areas such as money and transactions, planning and managing finances, risk and return, and the financial landscape.

The data collected through PISA’s financial literacy assessment offers valuable insights for policymakers, educators, and researchers. It allows them to compare the financial literacy levels of students across different countries and identify areas where educational systems may be falling short. Furthermore, it helps to pinpoint demographic groups that may be particularly vulnerable to financial exclusion or exploitation.

The results of PISA financial literacy assessments have often highlighted significant disparities across countries and within countries based on socioeconomic background. This underscores the importance of targeted interventions and financial education programs to equip young people with the necessary skills to manage their finances effectively. Countries with stronger performance tend to integrate financial literacy into their curricula, starting at an early age. These programs often focus on practical skills, such as budgeting and saving, and emphasize the importance of long-term financial planning.

The findings from PISA financial literacy assessments have spurred many countries to prioritize financial education in schools. By promoting financial literacy, societies can empower individuals to make informed financial decisions, improve their financial well-being, and contribute to a more stable and prosperous economy. Continued assessment and analysis of financial literacy, as conducted by PISA, are crucial for monitoring progress and identifying effective strategies to improve financial education worldwide.