Students from Shanghai scored the highest in financial literacy among those from 18 countries in the world.
Although financial literacy among American teenagers is perceived as a problem, the U.S. ranks in the middle of the pack among 13 countries that participated in a worldwide study on teenage financial understanding.
The Programme for International Student Assessment performed by the Organization for Economic Cooperation and Development showed that American 15-year-olds ranked ninth among 18 countries that participated in the study.
Approximately 29,000 students in 18 countries and economies took part in the test, which was designed to determine their level of knowledge and skills in dealing with financial issues, including understanding a bank statement, how loans work and the cost benefits of insurance.
“Developing financial literacy skills and knowledge is critical now that individuals are becoming increasingly responsible at an ever earlier age for financial risks affecting their future,’’ said Angel Gurria, Secretary-General of the OECD.
Shanghai-China received the highest ranking among its students, followed by the Flemish community of Belgium, Estonia, Australia and New Zealand. The United States ranked ahead of the Russian Federation, France, Spain and Italy, among others.
The report showed that more than one in every six American students did not reach the baseline level of proficiency in financial literacy. On the other end of the spectrum, one in 10 students in the U.S. reached the level of “top performer’’, with the understanding of difficult financial problems and decisions that will have to be made in adulthood.
About 50 percent of U.S. students had bank accounts, and those that did performed better in the tests than those that did not. However, when socio-economic status was taken into account, the gap related to bank accounts disappeared.
American education systems differ state-to-state in terms of financial literacy requirements. The study showed little difference between American girls and boys, and only a slight difference between non-immigrant and immigrant children. Students with at least one parent working in a finance-related occupation performed much better than those who did not have a parent in that industry.
The report also showed that 69 percent of American 15-year-old students have earned money from working outside the home.
The countries with the lowest scores for students in terms of financial literacy were the Slovak Republic (16th), Italy (17th) and Colombia (18th).
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.