America didn’t even crack the top 5 when it comes to financial literacy among teenagers
More than a fifth of U.S. teenagers lack basic financial literacy skills — and things aren’t improving,
China had the most financially literate teens in the world, according to a report released Wednesday by the Program for International Student Assessment, which evaluates 15-year-old students’ skills and knowledge in science, reading and mathematics every three years across 15 countries. Since 2012, the assessment has also included measures of financial literacy.
The Chinese students tested lived in four provinces: Beijing, Shanghai, Jiangsu and Guangdong. A third of them reached high enough proficiency to be considered top performing, meaning they can look ahead to solve financial problems or make financial decisions with the future in mind. Comparatively, only 10% of American students qualified for this top bracket.
Following China, students from Belgium and Canada performed best in the assessment. The U.S. only ranked seventh overall, and Americans’ average scores remained unchanged from 2012. Countries that performed worse than America include Italy, Spain and Brazil.
“American teens were completely average when it comes to demonstrating a strong knowledge of financial skills,” Billy Hensley, senior director of education with the Denver, Colo.-based nonprofit National Endowment for Financial Education, said in a statement on the report. “It’s clear that we need a better national strategy to teach youth.”
And not all American students fared equally on the assessment, suggesting the opportunities and, perhaps, quality of education for children across public and private U.S. schools varies dramatically. Only 3% of students from lower-income schools received top marks, compared with 45% of teens from higher-income schools. Students with a bank account scored significantly higher as well.
It may not be entirely surprising that American students are middle of the road. As of 2015, only five states required high-school students to take a class about money, leaving many unprepared for the tough financial choices they will need to make in college. Young Americans aren’t the only ones lacking financial knowledge. In a recent retirement literacy quiz hosted by the American College of financial services, nearly 75% of retirement-age Americans failed.
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Jacob Passy is a personal-finance reporter for MarketWatch and is based in New York.