Financial literacy under the microscope

For the first time since the Programme for International Student Assessment (PISA) began across international countries, the financial literacy of 15 year-olds will be assessed. In New Zealand 180 schools (about 5,500 New Zealand students) have been randomly selected, and marking will occur in September and October.

PISA is a large international study of the mathematical, reading, scientific and financial literacy capabilities of 15-year-old students around the world. It is a collaborative effort among participating countries (65 in 2012) commissioned by the Organisation for Economic Co-operation and Development (OECD).

The interesting thing about the PISA study is that it focuses on not the absorption of knowledge but how the selected 15 year-olds are able to:

• Meet the challenges of the future
• Analyse, reason and communicate their ideas effectively
• Develop the capacity to continue learning throughout life

Then from the data the study hopes to find out if there are some ways of organising schools that make them more effective than others.

In many respects this last goal mirrors the policies of the current New Zealand Government. Ostensibly, national standards and performance pay are to give an incentive to lift student achievement. But in what?

NCEA units are prescriptive in their achievement targets, and to ensure the most students achieve the greatest number of the standards, the skills that will help them meet the challenges of the future can only be an ‘also-ran’ – something to be done if there is time after teaching the basics.

If 15 year-olds are to learn to analyse, reason and communicate their ideas effectively then they must have a clear understanding of how the skills they are learning relate to their future. They must also grasp that this is only the first stage in their lifetime of learning and developing skills. Too many young people in this age-group are already turned off school (learning) because they see it as having no relevance to them. All they want to do is leave school and start earning.

That’s where financial literacy is really required. But is it on the school curriculum? Primary maths teaches about currency, and some secondary home economics and economics classes include budgeting and other financial information. However, not everyone takes these classes. So where does it fit for the other 15 year-olds?

• Of course, the first issue is: what questions/tasks will be used to assess financial literacy?
• Has it been designed to remove any skew from cultural bias? (I wonder if this is ever possible.)
• And pivotal to the financial literacy outcome is: how does PISA define ‘financial literacy’?

I shall watch with interest to find out where New Zealand sits on the financial literacy scales.

Heather Sylvawood, Director, Edutech KM Ltd, www.edutechkm.com