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PISA is a collaborative effort, bringing together experts from the participating countries, steered jointly by their governments on the basis of shared, policy-driven interests.

Financial literacy is now globally recognised as an essential life skill. The PISA financial literacy assessment provides a picture of 15-year-olds’ ability to apply their financial knowledge and skills to real-life situations involving financial issues and decisions. This report looks at how students’ financial literacy varies across and within the 15 participating countries and economies, and how it is associated with student characteristics such as gender, socio-economic status and immigrant background. It also examines the association between students’ financial literacy and their experience with money matters and their expectations for the future.

This chapter discusses how students would behave in hypothetical spending and saving situations, similar to those that they may encounter in their current lives or in the near future. It then discusses how such behaviour is related to their financial literacy. The chapter then looks at the relationship between performance in financial literacy and students’ expectations for their studies and careers, to see whether financially literate students are more willing to invest in their future, after taking into account their socio-economic status and performance in other subjects assessed by PISA.

Basic financial literacy is an essential life skill. Individuals make financial decisions for themselves at all ages: from children deciding how to spend their pocket money to teenagers entering the world of work, from young adults purchasing their first home to older adults managing their retirement savings. Financial literacy helps individuals to navigate these decisions and strengthens their financial well-being. In this spirit, it also promotes inclusive growth and more resilient financial systems and economies.

This chapter examines how financial literacy performance varies within countries and economies and how it is associated with the demographic and socio-economic characteristics of students and their families. In particular, the chapter looks at performance differences related to students’ gender, socio-economic status, immigrant background, language spoken at home and attitudes towards learning.

The PISA 2015 assessment of financial literacy among 15-year-old students was the second of its kind. It assesses the extent to which students in 15 participating countries and economies have the knowledge and skills, acquired both in and outside of school, that are essential for making financial decisions and plans for their future. This chapter highlights the importance of financial literacy for students in their current lives and as they move into adulthood. It then describes students’ exposure to financial education at school. The chapter concludes with a description of how financial literacy is defined and assessed in the 2015 financial literacy assessment, and presents sample test questions.

“What is important for citizens to know and be able to do?” In response to that question and to the need for internationally comparable evidence on student performance, the Organisation for Economic Co-operation and Development (OECD) launched the triennial survey of 15-year-old students around the world known as the Programme for International Students Assessment, or PISA. PISA assesses the extent to which 15-year-old students, near the end of their compulsory education, have acquired key knowledge and skills that are essential for full participation in modern societies. The assessment focuses on the core school subjects of science, reading and mathematics. Students’ proficiency in an innovative domain is also assessed (in 2015, this domain is collaborative problem solving). The assessment does not just ascertain whether students can reproduce knowledge; it also examines how well students can extrapolate from what they have learned and can apply that knowledge in unfamiliar settings, both in and outside of school. This approach reflects the fact that modern economies reward individuals not for what they know, but for what they can do with what they know.

Financial literacy is now globally recognised as an essential life skill. Globalisation and digital technologies have made financial services and products more widely accessible and at the same time more challenging. Many young people face financial decisions and are already consumers of financial services, from bank accounts to prepaid debit cards. Financial education is acknowledged as a complement to financial consumer protection, inclusion and regulation, as a way to improve individual decision making and well-being, and to support financial stability and inclusive growth.

Young people are already using money and financial services and will soon have to take decisions with long-term financial consequences. Results from the PISA 2015 financial literacy assessment show that many students, in countries and economies at all levels of economic and financial development, need to improve their financial literacy. This chapter analyses which students show weaknesses in financial literacy and what these disparities imply for policy and practice.

This chapter describes students’ experience with money, and in particular how frequently they discuss money matters with parents and friends, whether they hold basic financial products and whether they receive or earn money from various sources, including family and work. The chapter identifies which students are more likely to have had these kinds of experiences, and investigates the relationship between having a practical understanding of money and financial literacy.

This chapter compares students’ performance in the 2015 PISA financial literacy assessment across countries and economies. It discusses what students know about financial literacy and how well they can apply what they know. It also describes how performance in 2015 compares to performance in 2012 in the countries and economies that participated in both assessments. The chapter then examines how student performance in financial literacy compares with performance in the core PISA subjects – mathematics, reading and science. The analysis is complemented with economic and financial information about participating countries and its association with students’ performance in financial literacy.