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Aussie students equal fifth in financial literacy

Sue Thomson reports on the achievement of Australia’s 15-year-olds in the latest PISA financial literacy assessment.

Australia is equal fifth in an international assessment of young people’s financial literacy, according to a new report from the Australian Council for Educational Research (ACER).

Conducted in 2015 as part of the OECD Programme for International Student Assessment (PISA) with support from the Australian Securities and Investments Commission (ASIC) as the Australian Government agency responsible for financial literacy, the supplementary PISA financial literacy assessment measured 15-year-olds’ knowledge of personal finances and ability to apply it to financial problems.

A total of 53 000 students from 15 countries and economies participated in the assessment, including 14 530 Australian students from 758 schools. In Australia, all students participating in the main PISA assessment also participated in the financial literacy assessment, while in other countries only a sample of their PISA participants completed the financial literacy assessment.

Australian students achieved an average score of 504 points, significantly above the OECD average of 489 points but significantly lower than the average score of 526 points that Australian students achieved in the first cycle of the PISA financial literacy assessment in 2012.

The Australian average score was significantly higher than the United States, Poland, Italy, Spain, the Slovak Republic, Chile, Lithuania, Peru and Brazil, but significantly lower than the average score for the participating Chinese provinces, as well as Belgium, Canada and the Russian Federation.

ACER’s analysis shows that students’ financial literacy depends in part on their overall mathematical and reading literacy. On average, for Australia, around 29 per cent of the financial literacy score reflected factors that were uniquely captured by the financial literacy assessment, while the remaining 71 per cent of the financial literacy score reflected skills that were measured in the mathematical literacy or reading literacy assessments.

PISA has already shown that the science, reading and mathematics achievement of Australian students is declining. What the supplementary PISA assessment shows is that financial literacy is also declining. In general, high performers in mathematics and reading are also high performers in financial literacy, while low performers in mathematics and reading are also low performers in financial literacy.

National comparisons

Australian students in metropolitan schools achieved an average score of 514 points, significantly higher by 36 points – about one year of schooling – than students in provincial schools and higher by 68 points – about two years of schooling – than students in remote schools.

The average financial literacy score for Indigenous students was 411 points, significantly lower than the OECD average of 489 points and also significantly lower than the average for non-Indigenous Australian students of 508 points. This is larger than the gap between Indigenous and non-Indigenous students on either scientific literacy (76 points), mathematical literacy (70 points) or reading literacy (71 points).

Most of the difference in scores is due to the lower socioeconomic level of Indigenous students and their weaker performance in mathematics and reading. Nevertheless, there is still an underlying difference in achievement in financial literacy that indicates that extra attention could be directed towards programs for Indigenous students.

In general, the higher the level of a student’s socioeconomic background, the better the student’s performance in financial literacy. The difference between socioeconomically advantaged and disadvantaged students was 107 points – or about three years of schooling.

Applying financial literacy

PISA 2015 asked students participating in the financial literacy assessment, if they didn’t have enough money to buy something they really wanted, would they: buy the item with money earmarked for something else; borrow money from a family member; borrow money from a friend; save more money; or not buy the item.

Low performers in financial literacy were less likely to report that they would not go ahead and buy the item, and more likely than the high performers to report that they would try and borrow money or buy the item with money earmarked for something else. This reflects the lack of financial understanding of this group of students. High performers in financial literacy were more likely to report that that they would save up to buy the item or not buy it. ■

Read the full report:
PISA 2015: Financial literacy in Australia by Sue Thomson and Lisa De Bortoli.

Further information:
Australia’s participation in the PISA 2015 financial literacy study was managed by ACER and funded by ASIC. Visit for further information and reports.


About the author

Dr Sue Thomson is the Deputy CEO (Research) at ACER, as well as the Head of Educational Monitoring and Research, and the Director of ACER's Surveys and International Assessments research program. 

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