As the global financial market has grown, achieving better educational attainment and financial literacy competence for enhancing the quality of life are equally important (Lusardi and Mitchell, 2014). Not only adults, but many adolescents have already faced financial decisions and are very likely to have growing complexity and uncertainty in the financial markets as they move into adulthood. Students who are more financially literate are more likely to achieve higher education degrees and higher-paying jobs (OECD, 2015).
In the 2015 PISA results, Chinese students (from Beijing, Shanghai, Jiangsu, and Guangdong, B-S-J-G) showed the highest average score among participant countries, while American students stayed right below the international average. What causes these differences? This study will investigate how financial curricula at school affect student financial literacy scores in the U.S. and China.
Financial literacy is defined as “a combination of awareness, knowledge, skill, attitude, and behavior necessary to make sound financial decisions and ultimately achieve individual financial wellbeing” (OECD, 2018, p. 4). Previous studies have shown people’s low level of financial knowledge and their causes (Chen and Volpe, 1998; Shim et al., 2010). Mandell (2004) found that few high school students know about necessary personal financial and credit management skills. Hilger and Hogarth (2002) used Michigan’s 2001 Survey of Consumers whose ages ranged from 18 to 97 and found financial illiterate people tended to be low income and minority.
Another line of relevant literature has investigated the way of effective teaching on financial literacy. Lusardi & Mitchell (2007) found a single type of financial retirement program may lead to less impact on financial literacy behaviors due to all different financial contexts and levels. Although many countries are now developing and implementing national strategies for financial education, limited evidence addresses what curriculums, teaching materials, and teaching methods are the most effective for the development of financial literacy competencies (OECD, 2017a).
Since the majority of financial literacy literature has focused on results targeted beyond 18 years-of-age, it is necessary to explore how 15-year-old students acquire financial literacy knowledge from the school curriculum.
1. How does financial curriculum affect students’ financial literacy competence in the U.S. and B-S-J-G(China)?
2. What are teachers’ perceptions of the current needs and gaps in financial literacy education?
In this comparative study, we will use mixed methods to investigate our research questions since “numbers can add insight, texture, and context to the repository of qualitative data” (Saldana, 2011, p.61).
The quantitative approach will draw on the PISA 2018 (Release date is 3rd December 2019), with more than half a million 15-year-olds from 80 countries and economies were participated. In addition to the preference of using the most up-to-date data, we use the PISA 2018 over the previous dataset because 1) the PISA 2012 did not include B-S-J-G(China) and 2) the PISA 2015 did not have the curriculum data.
Variables are accessed by the PISA 2018 Financial Literacy Questionnaire: 1)Financial literacy, a 43-item student questionnaire, is reported with the overall score and the related proficiency levels from 1 to 5; 2) Curriculum configuration addresses how the financial literacy course is delivered – as a separate class, as part of another subject or outside school.
Because PISA data have a “clustered” structure (students nested in schools), a two-level multilevel model will be conducted to evaluate the effects of curriculum configuration on financial literacy. The extent to which changes may be explained by the individual (gender, SES) and school-level (school location) factors are also examined. Weighting and dummy coding will be done before entering the data into the model. Analyses will be conducted using SPSS version 25 (IBM, Armonk, NY).
We will collect qualitative data from secondary school teachers in the U.S. and China during the 2019-2020 school year. By using homogeneous sampling (Creswell, 2007), we will conduct interviews (Spradley, 1979) with three teachers, each coming from three urban schools, from each country. During interviews, we will investigate what curriculums and materials are used and how they organize financial education classes. Each interview will be recorded with a voice recorder and transcribed verbatim. We will then arrange a focus group for more in-depth discussion around the financial curriculum, teaching difficulties, students’ needs, and other embedded systems that support or hinder their financial education. We will analyze data with open coding in the first round and further rounds of coding for finding analytic synthesized patterns and emerged specific themes (Saldana, 2012).
This mixed-method study suggests that the provision of financial education at schools can be a mechanism for improving students’ financial literacy competence. Some of the shared curricula feature, such as compulsory financial education, yield better results in students’ financial literacy.
Our results also demonstrate different financial education course configurations within and across the U.S. and China. Each country has its own unique approaches and perspectives on financial education. While some schools have their own curriculums to facilitate more formal financial education, for example, using more accessible learning materials, others rely on individual teachers who recognize the importance to discuss money matters in classrooms. Furthermore, financial education quality and level tend to differ depending on the acquired teachers’ financial literacy knowledge. The teachers who have fewer financial decision experiences tend to express less confidence in teaching financial literacy. We also find some teachers holding doubts about the necessity of teaching financial literacy at this age. So, it is necessary to consider how teachers can get involved with teaching financial literacy, having more learning materials, time, and beliefs of money matter importance.
This study will contribute to expanding the understanding of how formal financial education organized by the school curriculum affect students’ financial literacy competence. Providing financial literacy courses at school is essential since it promotes equal access to financial knowledge, especially for low SES students. Through this study, educators and policymakers will have the sense to implement effective formal financial education to improve financial literacy competence for all students.
Yujin Oh is a PhD student and a graduate assistant in K-12 educational administration, and a UCEA Jackson Scholar for 2019-21. Before coming to MSU in 2018, She has been working as a public elementary school teacher, serving grades 1 to 6, for over ten years in Seoul, South Korea. She earned her master’s degree at Seoul National University, majoring in Educational Administration. Her research interests include school leadership for teacher learning and the policy implementation process.
Jiawei Li is a PhD student in Measurement and Quantitative Methods. She earned her master’s degree at New York University, majoring in Human Development and Social Interaction. Her current research focuses on understanding how individual differences may change over time as a function of home/school experiences. Other areas of interest include the use and interpretation of statistical models and psychological measurement in educational research.