But it turns out a lack of financial literacy isn't just a problem in the United States — and it starts early. About one in four 15-year-olds in the 15 countries and regions that took part in the latest OECD Programme for International Student Assessment test of financial literacy were unable to make "even simple decisions on everyday spending," while only one in 10 can understand complicated issues like income tax: perhaps an argument for better financial education in high school?
"While almost 60% of these students have a bank account and more than 60% earn money from some type of working activity, many cannot recognize the value of a simple budget, let alone understand a bank statement or a pay slip," Angel Gurria, OECD secretary-general, said in remarks on the report's release Wednesday. "This is shocking!"
Just 12% scored at the highest levels of financial literacy, while 22% percent scored below the baseline level of proficiency, according to the report. American teens scored just above average, while Chinese students scored the highest. However, as Bloomberg points out, international comparisons are tricky because in some countries only a "relatively well-educated segment of the population took the test," which could skew the results.
Let's see how well you can do: Below are five questions from the PISA test. Scroll down for answers at the bottom of this story.
Here is an invoice. Why was it sent to Sarah?
A. Because Sarah needs to pay the money to Breezy Clothing.B. Because Breezy Clothing needs to pay the money to Sarah.C. Because Sarah has paid the money to Breezy Clothing.D. Because Breezy Clothing has paid the money to Sarah.
How many "zeds" has Breezy Clothing charged for delivering the clothes?
Here is a stock chart for a company called Rich Rock.
A. True or false: The best month to buy the shares was September.B. True or false: The share price increased by about 50% over the year.
Here is a pay stub for an employee.
How much did Jane’s employer pay into her bank account on 31 July?
David banks with ZedBank. He receives this email.
Which of these statements would be good advice for David?
A. Reply to the email message and provide his Internet banking details.B. Contact his bank to inquire about the email message.C. If the link looks like it's the same as his bank’s website address, click on the link and follow the instructions.
The OECD argues that schools have a huge role to play in leveling the financial literacy playing field, given the correlation between a teen's family's financial background and their scores: "The fact that students' financial literacy skills are strongly correlated to their socioeconomic status — or whether they or their parents are foreign-born — means that not all students have the same opportunities to acquire financial literacy if they rely solely on what they can learn from their family," the organization wrote.
3. True; false
4. 2,500 zeds
5. B (No; yes; no)
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