15-year-olds in the U.S. are no smarter about personal money management today than they were three years ago, an eagerly awaited international assessment shows. One in five lacks the most basic understanding of how money works, and as a nation the U.S. ranks 7th in a comparison of 15 countries.
Young people in China, Belgium, Canada and Russia scored best. China, which has a strong math and education culture, routinely aces assessments like this one. Russia, which started at a fairly low base and has stepped up its financial education efforts, showed the biggest improvement, along with Italy. Declining were Poland, the Slovak Republic, Australia and Spain.
The results were unveiled Wednesday in Paris as part of the OECD Program for International Student Assessment (PISA), which includes a look at financial literacy. Scores were recorded in 2015. But this was their first release. Student scores in the U.S. were essentially unchanged from 2012, the first year the U.S. participated.
“This doesn’t surprise me,” says Billy Hensley, director of education at National Endowment for Financial Education. “There has not been a huge change or shift in our national strategy for financial education. When you do nothing, you stay where you were.”
Socio-economic status has a huge bearing on scores. Just 3% of U.S. students from lower-income schools are high performers while 45% of students from higher-income schools are top performers. Among the low performers, 38% are from lower-income schools while 16% are from higher-income schools.
These figures suggest an urgent need to help bring disadvantaged families into the financial mainstream through financial education. Among all students in the survey, 53% have a bank account—an important distinction, as students with a bank account, on average, scored far higher.
At the most basic level, students were asked, for example, whether it was wiser to buy tomatoes by number or weight—knowing that weight yielded the lowest price per pound. At the highest level, students were asked, for example, to identify a common online fraud known as “phishing” and choose the correct action (contact their bank). Only 10% of U.S. students achieved the highest level, compared to 33% in China.
Two states—Massachusetts and North Carolina—chose to participate as their own benchmark. Massachusetts scored well, ranking ahead of the U.S. as a whole and just below third-ranked Canada. North Carolina’s score was at the U.S. average.