Skip to main content
Advertising

Originally published July 9, 2014 at 6:44 AM | Page modified July 10, 2014 at 12:27 AM

  • Share:
             
  • Comments
  • Print

US students in middle of pack on financial knowhow

In an increasingly global economy, just 1 in 10 teenagers around the world is able to make some key -- but complex -- financial decisions, including choosing among various loans or analyzing invoices and pay slips.


Associated Press

advertising

WASHINGTON —

In an increasingly global economy, just 1 in 10 teenagers around the world is able to make some key -- but complex -- financial decisions, including choosing among various loans or analyzing invoices and pay slips.

The picture is no better in the United States, where only 9.4 percent of 15-year-olds were able to answer the most difficult questions on an international test of their financial knowledge and skills. More than 1 in 6 U.S. students did not reach the baseline level of proficiency in financial literacy. At best, those students could make only simple decisions on everyday spending, said a report released Wednesday by the Paris-based Organization for Economic Cooperation and Development.

OECD called financial literacy "an essential life skill" for teens. Already at 15, many have bank accounts and debit cards. And "many students nearing the end of compulsory education also have to decide, with their parents, whether to continue with post-compulsory education and how to finance such education," the report said.

Alex McClain, 15, of Anderson Township, Ohio, does not have a bank account. But he says taking a personal finance course last semester has better prepared him.

"I learned about how to do a check, even though I rarely will do that," McClain said during a visit to Washington. "I know how to manage money better now, and how to get out of bankruptcy if you get into a problem."

China's financial hub of Shanghai had the highest average score -- 603 points -- for teens who participated in OECD's Program for International Student Assessment, or PISA. The U.S., by comparison, had an average score of 492 -- smack in the middle of the 18 countries and economies studied. Colombia, at the bottom, scored 379.

In the rankings, Shanghai was followed by the Flemish Community of Belgium, Estonia, Australia, New Zealand, the Czech Republic, Poland, Latvia, the U.S., Russia and France. At the bottom of the list: Slovenia, Spain, Croatia, Israel, the Slovak Republic, Italy and Colombia.

Reacting to the study, U.S. Education Secretary Arne Duncan said average isn't "good enough" and American schools can do better.

"Our economy is changing so much and the idea of young people going into the world of work, staying with one job for 40 years, having secure pension and retirement, those jobs are basically gone," Duncan told reporters Wednesday. Young people need to have a "level of financial literacy that 20 or 30, 40 years ago, maybe wasn't applied. But today it's an absolute necessity."

The questions on the two-hour paper test ranged from simple to complex. The easiest questions asked students to display basic financial literacy skills, such as recognizing the purpose of an invoice or comparing prices per unit to determine which had a better value.

The most difficult asked students to analyze two loan proposals with differing rates and terms and choose the better offer.

Michael Davidson, head of early childhood education and schools division for the OECD, says successful schools don't let students fall behind. Shanghai schools, he said, perform well because they identify students who are struggling and provide the support those children need.

Financial education in schools varies.

In New Zealand, for example, financial literacy has been included in the curriculum since 2007, the report said. And in the Pudong New Area of Shanghai-China, regular training on finance has been part of the program since 2009 in primary and lower secondary schools.

In the U.S., just 19 states require a course in personal finance to be offered in high school, according to a 2014 report from the Council for Economic Education. Those states are: New Hampshire, New Jersey, Virginia, West Virginia, North Carolina, Georgia, Florida, Alabama, Mississippi, Louisiana, Texas, Tennessee, Missouri, New Mexico, South Dakota, North Dakota, Arizona, Utah, and Idaho.

The financial literacy study by the Organization for Economic Cooperation and Development was administered in 2012 to approximately 29,000 15-year-old students in 13 OECD countries and economies and five partner countries and economies.

____

Associated Press writer Stacy A. Anderson contributed to this report.



Want unlimited access to seattletimes.com? Subscribe now!

Also in Business & Technology

News where, when and how you want it

Email Icon

Where in the world are Seahawks fans?

Where in the world are Seahawks fans?

Put your marker on The Seattle Times interactive map and share your fan story.

Advertising

Advertising


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►