PISA 2022 Results (Volume IV)

9. From data to insights

Abstract

Most 15-year-old students already are financial consumers, although many still lack some of the skills, attitudes and knowledge that are necessary to make sound and independent financial decisions. Results from the PISA 2022 financial literacy assessment and questionnaire show that many students, in countries and economies at all levels of economic and financial development, have room to improve their financial literacy. This chapter summarises the strengths and weaknesses of 15-year-old students' financial literacy, highlights variations in financial literacy across and within countries and economies and suggests how policies and practices can address these issues.

At the age of 15, many students in participating countries and economies already are users of financial products and services, including digital ones. As they grow older, they will need to have the appropriate skills, attitudes, and knowledge to navigate increasingly complex financial decisions and to protect themselves from growing risks of financial frauds and scams. Data from PISA 2022 show that many 15-year-old students already hold a bank account and/or a payment or debit card, and that in the vast majority of participating countries and economies, more than one in two students reported that they had bought something on line (either alone or with a family member) at some point during the 12 months prior to sitting the assessment.

The extent to which students engage in responsible financial behaviours and have long-term financial attitudes also vary according to students’ level of financial literacy. PISA data allow to identify students’ financial behaviours and attitudes that are positively associated with their level of financial literacy. These include saving money, comparing prices between shops before making a purchase, displaying saving-oriented attitudes, enjoying discussing about money or reporting a limited level of influence from friends on personal spending decisions. This suggests that financially literate students may be more forward-looking and more likely to recognise the importance of being financially proactive. It also suggests that improving financial literacy amongst students might be a way of equipping them with the skills they will need as they move into adulthood.

The PISA 2022 financial literacy assessment included a test of 15-year-olds’ financial literacy – their understanding of financial concepts and risks, and the skills to make effective decisions and participate in economic life – and a questionnaire designed to investigate their exposure to financial education and their money-related experiences, behaviours, and attitudes. The main results of the 2022 assessment were broadly consistent with the results of the 2012, 2015 and 2018 assessments, which covered a somewhat different set of countries. However, the questionnaire in the 2022 assessment was more extensive than previous questionnaires, allowing for greater insight into students’ financial lives, attitudes and behaviours. This chapter highlights some policy suggestions drawn from the results of the PISA 2022 financial literacy assessment.

Many policy interventions that improve performance in the core PISA subjects, as discussed in Volumes I and II of PISA 2022 Results (OECD, 2023[1]; [2]) are also likely to improve performance in financial literacy, as basic reading and numerical abilities are necessary for students to fully express their financial skills, and given that performance in financial literacy is strongly correlated with performance in mathematics and reading. Nevertheless, a sizeable part of the variation in financial literacy performance is not explained by mathematics and reading performance, from 13% in Malaysia to 27% in Italy and Norway. This section will focus primarily on policy interventions that target skills that are unique to financial literacy.

Address the needs of low-performing students

Results from the PISA 2022 financial literacy assessment show that many students, in countries and economies at all levels of economic and financial development, need to improve their financial literacy.

On average across OECD countries and economies, 18% of students performed below Level 2 in financial literacy. These students displayed only basic financial literacy skills, such as identifying common financial products and terms, and interpreting information related to basic financial concepts. They might have been able to recognise the difference between needs and wants and make simple decisions on everyday spending, but they were not yet able to apply their knowledge to make financial decisions in contexts that were not immediately relevant to them, such as recognising the value of a simple budget or undertaking a simple assessment of value-for-money. Over two in five students in Brazil, Bulgaria, Costa Rica, Malaysia, Peru and Saudi Arabia performed below Level 2; and even in the high-performing Flemish community of Belgium, the Canadian provinces* and Denmark*, between 11% and 13% of students scored below Level 2.

Low-performing students need support to improve their abilities to fully participate in economic life. They need to acquire the knowledge and skills that will allow them to plan for the short and long term, take into account the implications of their financial decisions for themselves and their families and for society, understand the wider financial landscape (such as knowing the purpose of income tax or insurance), and save so that they can make ends meet in periods of hardship or unexpected shocks.

More low-performing students in financial literacy are found among certain demographic groups. While there was a limited gender gap in mean financial literacy performance in favour of boys, more boys than girls were low performers in financial literacy in PISA 2022, on average across OECD countries and economies. More boys than girls scored below Level 1 in financial literacy in Brazil, Bulgaria, the Canadian provinces*, Malaysia, Norway, Saudi Arabia and the United Arab Emirates, by between 2 and 10 percentage points. Box IV.9.1 highlights gender differences in financial experiences, attitudes and behaviours in the PISA 2022 financial literacy assessment. These differences call for ensuring that financial literacy programmes and initiatives address the needs of both boys and girls.

Box IV.9.1.  Gender differences in financial experiences, attitudes and behaviours

The gender gap in financial literacy performance was small on average across OECD countries and economies (5 score points in favour of boys) and there were no gender differences in performance in 10 out of 20 participating countries and economies. However, gender differences were observed in many aspects of financial experience, attitudes and behaviours. Difference in these aspects may be related to the opportunities that boys and girls have of improving their financial literacy. This box details those elements for which differences of at least 5 percentage points between girls and boys were observed on average across OECD countries and economies.

More boys than girls reported having exposure to money-related topics or tasks in their day-to-day lives, either at school or at home. On average across OECD countries and economies, more boys than girls reported discussing news related to economics or finance with their parents (by 9 percentage points), and knowing about several terms related to economics and finance, in particular the less familiar ones. More boys than girls reported learning and still knowing the meaning of the following terms: return on investment, exchange rate, shares/stocks, depreciation, diversification, compound interest, dividend, interest payment and central bank. More boys than girls also reported having encountered personal finance-related tasks in a school lesson, such as discussing the rights of consumers when dealing with financial institutions (by 10 percentage points), discussing the ways in which money invested in the stock market changes value over time (by 7 percentage points) and exploring ways of planning to pay an expense (by 6 percentage points). Additionally, 9 percentage points more boys than girls reported having learned how to manage money in an activity outside school.

More boys than girls also declared having actual experience in financial transactions, both traditional and digital. In the 12 months prior to the PISA assessment, on average across OECD countries and economies, more boys than girls (by 7 percentage points) reported having saved in an account, sent money to others using a smartphone (by 8 percentage points) and made a payment using a mobile phone (by7 percentage points).

Boys displayed greater confidence than girls in performing a range of financial transactions and behaviours. On average across OECD countries and economies, more boys than girls declared feeling confident understanding a sales contract (by 19 percentage points) and planning their spending considering their current financial situation (by 8 percentage points). More boys than girls also declared feeling confident in dealing with traditional money matters such as understanding bank statements, filling forms at the bank, making a money transfer or keeping track of their account balance. Boys also declared feeling more confident than girls when using digital financial services, such as ensuring the safety of sensitive information when making an electronic payment or using online banking or when using digital or electronic devices outside of a bank to transfer money, to keep track of their balance or to pay with a mobile device.

More boys than girls reported enjoying talking about money matters, by 17 percentage points on average across OECD countries and economies.

However, more boys than girls reported earning money for work activities inside or outside of home, and receiving money for this work was negatively associated with financial literacy performance. Between 5 and 13 percentage points more boys declared receiving money from working in a family business, selling things (e.g. at local markets or on eBay), working outside school hours (e.g. a holiday job or part-time work) or as an allowance or pocket money for regularly doing chores at home.

Boys also displayed less autonomy and independence in their spending decisions than girls, with 6 percentage points more boys than girls having to ask their parents for permission before spending any money on their own, and 8 percentage points more boys than girls having bought something because their friends had it, on average across OECD countries and economies.

Tackle socio-economic inequalities

Students who scored below Level 2 were over-represented amongst socio-economically disadvantaged groups. Disadvantaged students scored more than one proficiency level lower in the financial literacy assessment than advantaged students, on average across OECD countries and economies (462 points, near the top end of Level 2 performance, compared to 549 points, near the top end of Level 3 performance). Not only did students from advantaged socio-economic backgrounds display higher performance in financial literacy, they also appeared to have more opportunities to learn about money matters than their disadvantaged peers. Box IV.9.2 details differences in financial experiences, attitudes and behaviours, for which sizeable differences were observed across socio-economic groups.

Financial literacy is relevant not just for those who have large sums of money to invest. Everyone needs to be financially literate, especially those who live on tight budgets and have little margin for error in case they make financial mistakes or experience external shocks. Moreover, the development of digital financial services means that financial services are becoming increasingly accessible to everyone, particularly to previously excluded segments of the population and young people. Those who use these services are exposed to new forms of risk, of which they should be aware.

Although disadvantaged students are amongst the least financially literate, they might be most in need of certain types of financial knowledge and skills. Evidence from PISA 2022 shows that while at least three in four students in every participating country and economy have engaged in responsible financial behaviours, such as checking that they were given the right change and checking how much money they have, in most participating countries and economies, disadvantaged students were less likely to do so than advantaged students. Disadvantaged students were significantly less likely than their advantaged peers to engage in responsible spending behaviours, such as comparing prices and waiting until a product became cheaper before they bought it.

If socio-economic disparities in skills and behaviours are not addressed early, they are likely to lead to even larger gaps in financial literacy as students become adults. Low-performing disadvantaged students need to be supported to ensure that they can safely navigate the financial system as they become more independent.

This type of support was provided in 8 of the 20 participating countries and economies (Austria, the Flemish community of Belgium, Bulgaria, Czechia, Hungary, Italy, Norway and Poland), where more socio-economically disadvantaged students than advantaged students reported having encountered money-related tasks and activities in school lessons. These school-led activities and interventions, focussed on the populations that could most benefit from them, are one way of tackling socio-economic inequalities, not only in students’ financial literacy but in the real-world outcomes that result from low financial literacy and poor financial decisions.

In the same vein, policy makers should also address other inequalities that may affect students’ abilities to become financially literate, such as those related to family background (specifically immigrant background), where a student lives or the type of study programme in which he or she is enrolled. In many cases, differences in financial literacy performance can be attributed largely to differences in performance in mathematics and reading, and interventions to improve skills in all subjects may be appropriate. However, there may also be a need for financial literacy-specific interventions. For example, information on financial products and practices can be prepared in a variety of languages for newly arrived immigrant students and their families, and it may be possible to integrate financial education into vocational students’ work placements.

Box IV.9.2.  Differences in financial experiences, attitudes and behaviours associated with socio-economic background

Not only do students from advantaged socio-economic backgrounds perform better in financial literacy, they also appear to have more opportunities to learn about money matters than their disadvantaged peers.

More socio-economically advantaged students reported discussing money matters, holding and using financial products, and making autonomous financial decisions than disadvantaged students. On average across OECD countries and economies, more socio-economically advantaged students than disadvantaged ones declared discussing weekly or monthly with their parents about various financial topics, including news related to economics and finance (by 10 percentage points), their own spending decisions (by 7 percentage points) and shopping on line (by 7 percentage points). More advantaged students than disadvantaged ones reported holding basic financial products such as a bank account (by 17 percentage points) or a payment/debit card (by 13 percentage points) and having experience with digital financial transactions such as buying on line (by 8 percentage points), on average across OECD countries and economies. More advantaged than disadvantaged students also reported receiving money from gifts (by 10 percentage points), on average across OECD countries and economies, while more disadvantaged students than advantaged ones reported having to ask permission to their parents before spending any money on their own (by 7 percentage points).

Socio-economically advantaged students also reported enjoying discussing money matters and feeling confident in their skills to handle financial decisions more than disadvantaged students. More advantaged students than disadvantaged ones reported that they enjoy discussing money matters (by 6 percentage points) on average across OECD countries and economies, and more advantaged students were confident they know how to manage their money (by 5 percentage points). More advantaged students than disadvantaged ones also reported feeling confident dealing with traditional money matters such as keeping track of their account balance (by 6 percentage points), and using digital financial services to pay with a debit card instead of cash (by 10 percentage points), to keep track of their balance or to pay with a mobile device (each by 6 percentage points), and to transfer money or to ensure the safety of sensitive information when making an electronic payment or using online banking (each by 5 percentage points).

More socio-economically disadvantaged students than advantaged ones reported earning money from work activities, suggesting that they may spend more time in activities that can potentially be detrimental to their school attendance or school work. For example, on average across OECD countries and economies, more disadvantaged students than advantaged one reported earning money from working for the family business (by 7 percentage points) or by working outside school hours (by 5 percentage points).

More socio-economically advantaged students reported responsible financial behaviours and long-term attitudes than disadvantaged students. On average across OECD countries and economies, more advantaged students than disadvantaged ones reported checking that they were given the right change when buying something (by 5 percentage points), checking how much money they have (by 4 percentage points), and comparing prices, either between physical shops (by 10 percentage points) or with an online shop (by 8 percentage points). More advantaged students than disadvantaged ones also reported planning their spending considering their current financial situation (by 10 percentage points), and fewer advantaged students reported buying things according to how they feel in the moment (by 5 percentage points), on average across OECD countries and economies. Advantaged students also reported more than their disadvantaged peers having a long-term orientation by working towards long-term goals (by 10 percentage points), and making saving goals for things they want to buy or do (by 3 percentage points).

Focus on students’ environment: parents and peers

What students know about financial literacy depends to a large extent on their families. In Austria, the Flemish community of Belgium, Bulgaria, Czechia, Hungary, Malaysia, Peru and Poland, 12% or more of the variation in financial literacy performance was related to students’ socio-economic status, which is a reflection of parents’ education and occupations, home possessions and educational resources available in the home. To some extent, socio-economically advantaged families can provide their children with more opportunities to acquire financial literacy skills than disadvantaged families.

But all parents have a role to play in developing their children’s financial literacy, not only through the resources that they make available to them but also through direct engagement. Parents are amongst the most important sources through which young people can develop values, attitudes, habits, norms, knowledge and behaviours about money and finance. Indeed, in every participating country and economy, two in three or more students reported that they discuss with their parents at least once a month their own saving decisions or money for things they want to buy.

Given their role in their children’s financial education, it is important that parents themselves are financially literate and can transmit accurate and appropriate information. Countries should continue to strengthen their initiatives targeting adults through national strategies for financial literacy, as advocated by the OECD Recommendation on Financial Literacy (OECD, 2020[3]). Targeting adults with low levels of financial literacy and disadvantaged adults can help reduce inequalities amongst those adults today, and through this transmission pathway, may contribute to reducing inequalities in the next generation.

Friends can also play an important role in shaping 15-year-olds’ behaviours and attitudes towards financial matters. PISA 2022 data show that students who report being most influenced by their friends when making decisions such as what to spend their allowance on, also score lower in financial literacy. After accounting for students’ characteristics and attitudes, students who declared that their friends had a strong influence on their spending decisions scored 30 points lower in financial literacy – i.e. about half a proficiency level - than those who did not report such influence, on average across OECD countries and economies. This finding highlights the importance of ensuring that all young people are equipped with the skills and knowledge necessary to make sound and independent financial decisions for themselves, and that targeting young people may have spillover effects through their peers.

Offer opportunities to acquire financial literacy in school to all

Schools may also be a channel through which financial education can be provided. Results from PISA 2022 indicate that there is a positive correlation between financial literacy performance and students’ exposure to money and learning finance-related terms at school. Students who reported having learned various financial or economics-related terms in school and still knowing their meaning displayed higher financial literacy performance than students who did not, after taking into account student and school characteristics as well as student performance in mathematics and reading, on average across OECD and all participating countries and economies.

Self-reported exposure appeared to vary across gender and socio-economic background. PISA 2022 data show that fewer girls than boys, and fewer students from disadvantaged socio-economic backgrounds than from advantaged ones reported having learned about financial and economics terms in school in the 12 months prior to taking the assessment. While motivation and experience in other contexts may affect students’ recollection of their exposure to financial literacy in school, it important that opportunities to learn basic financial skills in school are offered to all students and especially to those who need them the most.

Exposure to financial or economics-related terms in school was associated with higher financial literacy performance, but the correlations between financial literacy performance and other aspects of delivering financial education provided in schools were less conclusive. This may reflect the lack of standardisation in the content of the financial education that is delivered in schools, which was not addressed in the questionnaire. Most participating countries and economies have enacted national strategies for financial literacy, but these strategies often give regions, schools and teachers considerable discretion as to whether and how to incorporate financial education into lessons. Indeed, financial literacy has emerged only relatively recently as a relevant skill for students and society at large, and it competes with other important skills, from global citizenship to coding, to be integrated into already overcrowded school curricula and students’ timetables. Financial literacy is therefore often not yet part of the topics that are assessed in school or that contribute to students’ graduation.

The most effective way of delivering financial education to students (and, indeed, to their parents) will likely depend on the context of the country, community, education system and school. As such, rigorous evaluations of financial education programmes, which are already being conducted in many jurisdictions, will provide useful information to policy makers as they continue to adjust and improve their national strategies. The ultimate goal of all of these programmes must be ensuring that students receive the information and support they need to make responsible and appropriate financial decisions confidently, both now and in their adult lives.

Ensure that opportunities to learn via access to and use of financial services is safe and age-appropriate

On average across OECD countries and economies, 63% of students hold an account at a financial institution, and 62% of students hold a payment card or a debit card. Inclusion in the financial system at an early age bodes well for financial inclusion later in life, which in turn underpins a wide range of activities necessary for being a confident and empowered citizen. PISA 2022 results suggest that some experience with basic financial products may provide an opportunity for developing financial skills, as holding an account at a bank or at another financial institution was associated with greater financial literacy performance than not holding such an account, after accounting for student characteristics and other experiences with money and basic financial products.

Moreover, digital financial transactions have become an essential and established component of everyday financial transactions; indeed, in almost every participating country and economy, a large majority of students had purchased something on line (either alone or with a family member) in the 12 months prior to sitting the PISA assessment. Digital inclusion is a prerequisite to taking part in digital financial services; for young people, digital inclusion and financial inclusion are often inextricably linked.

However, on average across OECD countries and economies, about one in three students was not confident using electronic devices to keep track of their balance or paying with a mobile device instead of using cash; and roughly two in five students were not confident using electronic devices to transfer money or ensuring the safety of sensitive information when making an electronic payment or using online banking. Digital financial products and services carry new risks, such as concerns about security and privacy, and a growing exposure to frauds and scams. A lack of experience with financial services can make young people, especially those with low levels of financial literacy, more likely to be victims of scams; indeed, scams may deliberately target young people. Access to online payment and credit services, including increasingly common “buy-now pay-later” schemes, means new risks related to hidden and potentially costly conditions. For safe and age-sensitive digital financial inclusion, young people should be made aware of the risks in engaging in digital financial transactions, and be empowered with appropriate digital and financial skills, so that they can engage in such transactions confidently and securely.

More generally, access to basic financial products and services by students should not only be accompanied by adequate skills, they should also be promoted within a sound financial consumer protection framework (G20/OECD, 2022[4]; OECD, 2024[5]), to ensure that young people are offered quality and safe products. For young people, access to financial products and services should be age-appropriate and should be accompanied by oversight by parents or guardians as necessary.

Strengthen attitudes in addition to knowledge and skills

The PISA 2022 financial literacy assessment explored the role of attitudes to a greater extent than previous assessments, showing a robust correlation between greater confidence and motivation and financial literacy performance.

Students who enjoyed talking about money matters and who felt confident in engaging with traditional and digital money matters, such as paying with a debit card instead of using cash or keeping track of their account balance, performed better in financial literacy than students who were not motivated or confident, on average across OECD countries and economies. Further, students who felt confident in their financial skills performed better in financial literacy. On average across OECD countries and economies, students who agreed that they know how to manage their money scored 30 points higher in financial literacy than those who disagreed, after accounting for students’ characteristics such as gender, socio-economic status and immigration background.

However, being overconfident may lead to poor financial decisions. Some 64% of low-performing students felt confident about knowing how to manage their money, on average across OECD countries and economies, suggesting that these students may need to be supported not only to develop their financial literacy skills to successfully manage their finances in the future, but also to develop a more realistic self-assessment of their knowledge.

Financial education programmes for children and young people should focus not only on imparting sound financial knowledge and prompting wise financial behaviours, but also on helping students develop the right attitudes towards money matters. Such programmes should offer students opportunities to experiment, learn by doing and confront real-life situations in order to help them grow their interest in money matters and confidence in their abilities, while at the same time not giving them unrealistic expectations about their abilities and ultimately helping them improve their financial literacy.

References

[4] G20/OECD (2022), Updated G20/OECD High-Level Principles on Financial Consumer Protection, https://www.oecd.org/finance/high-level-principles-on-financial-consumer-protection.htm.

[5] OECD (2024), Recommendation of the Council on High-Level Principles on Financial Consumer Protection, https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0394.

[1] OECD (2023), PISA 2022 Results (Volume I): The State of Learning and Equity in Education, PISA, OECD Publishing, Paris, https://doi.org/10.1787/53f23881-en.

[2] OECD (2023), PISA 2022 Results (Volume II): Learning During – and From – Disruption, PISA, OECD Publishing, Paris, https://doi.org/10.1787/a97db61c-en.

[3] OECD (2020), Recommendation of the Council on Financial Literacy, https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0461.