7 reasons why the PISA 2015 Financial Literacy Skills is crucial
On May 24, the OECD will release the results of the PISA 2015 Financial Literacy Skills. The final data will determine whether the students that have taken this important test are able to solve basic financial problems, make informed decisions about day to day expenses or use a credit card.
Financial literacy is an essential element in the education of critical and responsible citizens. For this reason, since 2012, the PISA report also assesses the level of knowledge of 15 year-old students in topics such as money and transactions, financial planning and management, or risk and profit, among others. These are the seven key questions to understand the importance of this test.
What is financial literacy according to the PISA report?
The PISA report defines this subject as: “the knowledge and understanding of financial concepts and risks, and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve the financial well-being of individuals and society, and to enable participation in economic life.”
Why a specific financial literacy assessment?
Finances are part of the day to day of teenagers, who already consume simple financial products and services such as bank accounts. The PISA assessment focuses on students approaching the end of compulsory education. All these students are at a defining point in their lives, and will soon have to decide whether to continue studying or start working once they finish this stage. Regardless of the path they choose, their financial education will be essential to lead a satisfactory life.
What is the test like?
The financial literacy test is administered every three years, just as the general assessment. This practical exam requires test-takers to interpret an invoice or make basic decisions regarding day-to-day expenses. One of the key changes in the 2015 edition is that, for the first time, only digital knowledge test forms and questionnaires were available.
Who took the test?
About 26,000 students took the financial literacy assessment tests in 2012. This is a representative sample of the approximately 30 million 15-year-olds that study in the 4,000 schools that exist in the 18 participating countries. In 2015, the test was taken by about 15 countries and economies.
What is it for?
Results can be pivotal for the future of the country, as they reflect whether young people have the tools necessary to be financially critical and responsible. That is why it is important to pay special attention to this assessment when defining educational plans, to correct shortcomings and boost the virtues of each country’s education systems.
Due to the methodology of the assessment itself, results allow to perform an international evaluation of the literacy of young students in finance-related topics, and compare the financial education levels between countries in order to identify best practices and the most effective national strategies.
The findings of the PISA assessment have allowed analyzing a broad number of issues, including how schools/high schools (as one of the primary sources of information) impact on the control process of the economic resources of students. One of these studies was drawn up by BBVA Research. The report analyzed in what ways does self-confidence affect the financial skills of youths in Spain and their financial knowledge.
Access the full study on The effect of self-confidence on financial literacy
How has Spain done so far?
According to the latest PISA Financial Literacy Assessment 2012, Spain ranks 13 of the 18 OECD countries that took the test. Spanish students got better scores than students from countries such as Israel or Italy, but lagged behind France, Belgium of the United States. Spain ranked in the middle of the table and offers great room for improvement.
What’s BBVA role in this assessment?
OECD and BBVA signed in 2010 a collaboration agreement whereby BBVA would provide economic support to the OECD to make this financial literacy test possible. Thus, both institutions sealed a deal to promote financial education as a key value for people. In 2014, BBVA and the OECD renewed their agreement with the purpose of promoting the assessment of financial literacy in the 2015 PISA Report, as essential field of knowledge for youths. In 2016, this agreement was renewed for the conduction of the 2018 assessment.
On May 24, the latest results of the financial literacy assessment will be presented in Paris. The assessment was conducted across 15 countries, including Spain. The presentation will be attended by OECD Secretary-General, Angel Gurría, and BBVA Group Executive Chairman, Francisco González.
BBVA, staunch advocate of this approach, has rolled out financial education programs in all geographies in which the group operates. BBVA’s collaboration does in no way entail the participation in the design of the methodology nor a previous access to the obtained results.
In February 2017, BBVA launched the Center for Financial Education and Capability, to raise awareness about the importance of acquiring the knowledge and developing financial skills as an essential issue that impacts peoples’ lives.