The test was included for the first time in the Programme for International Student Assessment (PISA) 2012. It is aimed at establishing the benchmarks for assessing and comparing the academic achievement of international countries.
The study was conducted by the Organization for Economic Co-operation and Development (OECD) which had been participated by 29,000 students that come from 18 different countries with distinct economies. It also revealed that when it comes to financial literacy, China's financial center Shanghai is undoubtedly the leader.
China's top ranking position is followed by Belgium and Estonia which occupied the 2nd and the 3rd spot respectively. Likewise, the bottom three are occupied by the Slovak Republic, Italy and Colombia. The US falls somewhere in the middle and is placed at the 9th spot with an average score 492.
Just like any standardized tests which have questions ranging from simple to complex, the paper and pencil test of OECD had similar scope and covered test items designed to measure a person's financial literacy skills. These would include understanding invoices, price comparing, loan proposal reviewing, proper credit card and debit card using, the risks and rewards involved in money spending and saving money.
Seventy percent of the students in the US are enrolled in schools that have financial education as one of their programs. Money management seemed to be an integral part of the US curriculum which targets the young teens to help them achieve a better life in America's post-recession stage.
As per Michael Davidson, OECD's head of schools, "Shanghai's strong performance can be attributed to an education system that focuses on intervention mechanisms to keep students from falling behind." In Shanghai, there is no correlation between one's social background and his performance in financial literacy. Compared to the US, only fifty percent of the students in Shanghai are attending schools that have a program on financial education. This means that Shanghai students enhance their financial literacy skills using other means.
In the US, Davidson noticed that the country has the strongest correlation between the student's social background and his skills in handling finances. Those that come from well-off backgrounds performed relatively higher in the assessment.
Financial literacy seemed to be lacking among American adults as well based on the Consumer Financial Literacy Survey conducted in 2013. This condition was addressed by the government through the establishment of its Financial Literacy and Education Commission of 2003. Some of its tasks are developing the national financial education website known as MyMoney.gov and a national strategy that deals with financial education.
