New data from the Organization for Economic Cooperation and Development (OECD) indicates that American students finish behind their international peers when it comes to financial literacy.
The results were the product of a test taken two years ago by some 30,000 15-year-old students in 18 countries. The test was designed to see if students could grasp various aspects of personal finance, such as calculating the balance of a bank account or determining the better of two loan proposals.
On the test, U.S. students averaged 492 points, a smidgen below the OECD average of 500. About 9 percent of U.S. students were top performers able to answer the most complex questions, while nearly 18 percent could not even demonstrate a basic level of proficiency needed to do more than make basic daily purchases.
Countries the U.S. finished behind included Australia, Belgium, Latvia, and even Poland. Finishing on top with an average of over 600 points were Chinese students from the city of Shanghai, which is tested independently of the entire country.
Countries finishing behind the U.S. included France, Israel, Russia, Spain and Italy. Finishing dead last was Colombia, whose students averaged a miserable 379 points, more than 80 points below the next-lowest country.
The U.S.’s result was hardly stellar, but it was also noticeably better than some other recent OECD studies involving American students. On Tuesday, a report indicated that poor students in the U.S. are unlikely to excel academically compared to those in other countries, while last fall the OECDhighlighted America’s math performance as significantly below average.
U.S. Secretary of Education Arne Duncan addressed the results while at an event Wednesday, telling reporters that the nature of the modern economy made financial know-how more important than ever.
“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,” said Duncan. With less security than in the past, Duncan said, students need to pick up abilities that “20 or 30, 40 years ago, maybe [weren’t] applied.”
In Shanghai’s school as well as those of some other high performers, personal finance is a required component of the learning curriculum, but only 19 states in the U.S. mandate require that finance courses be offered in high school.