Financial Literacy, Numeracy and Schooling : Evidence from Developed Countries

Financial literacy is low among young people and their uninformed choices may have costly and long-lasting consequences. This paper uses information on approximately 52,000 fifteen-year-old students participating in the 2018 OECD Programme for International Student Assessment (PISA) to provide fresh evidence on two drivers for youth financial skills: math skills and students’ exposure to financial education at school. Our results are threefold. First, mathematical skills have a positive impact on financial skills, and to a greater extent than reading skills. Second, an extension based on the 2012 wave of PISA suggests that the transfer of competences from mathematics to financial literacy can be enhanced when teaching strategies focus more on stimulating “cognitive activation”. Third, we show how the percentage of students having the chance to receive financial education at school varies widely across countries, and how having such an opportunity positively influences financial achievements