You’ve surely heard it before: American students lack the basics of financial literacy. A new study finds the problem to be apparent even with high schoolers studying the subject and taking part in a competition that featured cash incentives.
I first learned about the new research from an article in The Oregonian newspaper.
On average, high school students who took a personal-finance exam last year only got about half the questions right (52 percent), according to the study.
The researchers also found a significant gender gap in performance among the nearly 6,700 students tested. Males scored higher than females in most areas, including budgeting, taxes, and investing on the Financial Fitness for Life High School Test, developed by the Council for Economic Education. Participating students were given 35 minutes to answer 30 multiple-choice questions.
The students were enrolled at the time in consumer science, personal finance, or similar classes, the researchers note, and were participating in a national competition focused on financial literacy. Incentives were provided throughout the process, including cash prizes for students and a gift card for teachers based on the number of student teams they registered, the study says.
“We believe our findings are representative of a best-case scenario for financial literacy in U.S. high schools since they were collected under competitive incentives,” Carlos Asarta, a co-author of the study and an associate professor at the University of Nebraska-Lincoln, said in an email.
The paper has been “conditionally accepted” for publication in the Journal of Economics and Finance Education, he said.
As my colleague Caralee Adams reported last year, some high schools and college campuses have been ramping up their financial-literacy efforts in recent years.
The new research comes as a prominent international assessment—best known by the acronym PISA—is starting to include financial literacy. The first round of results that incorporate the topic will be released next year.
Finally, here’s an opinion piece published last year on EdWeek‘s Teacher channel making the case for financial literacy in high school.