Financial literacy among Finnish adolescents in PISA 2018: the role of financial learning and dispositional factors

Abstract

The aim or the present study was to examine the relative importance of financial education in school and families and dispositional factors (competitiveness, work mastery, meta-cognition) in predicting financial literacy among Finnish adolescents. The data on the 4328 Finnish 15-year-olds was drawn from the PISA 2018 assessment. Financial literacy was measured by tests, and financial education and dispositional factors were assessed by adolescent questionnaires. First, the results showed that financial education in school was positively associated with adolescents’ financial literacy skills, whereas parental involvement in financial matters did not relate or related negatively to financial literacy scores. Second, dispositional factors, such as competitiveness, work mastery, and meta-cognition (effective strategies to understand/remember information, to summarize information, and to evaluate source credibility) were the strongest positive predictors of the financial literacy scores. Overall, the present study emphasizes that certain social factors (schools and families) and especially dispositional characteristics (personality/motivation and critical thinking/learning strategies) may shape the development of the financial skills of adolescents.

School and family environments promote adolescents' financial confidence: Indirect paths to financial literacy skills in Finnish PISA 2018

“…Interestingly, the latest PISA 2018 assessment showed that parental involvement in financial matters with their children was the lowest in Estonia and Finland (OECD, 2020). Taken together, despite expectations of the PISA financial literacy framework (OECD, 2019) and many previous studies to expect a positive link between parental involvement in financial matters and financial literacy, skills, and knowledge, empirical findings are mixed, indicating different cultures of communication between countries (Moreno‐Herrero et al, 2018; Silinskas, Ahonen, et al, 2021). Moreover, previous studies have focused on the associations of family socialization factors with financial literacy skills (Silinskas, Ahonen, et al, 2021).…”

“…Taken together, despite expectations of the PISA financial literacy framework (OECD, 2019) and many previous studies to expect a positive link between parental involvement in financial matters and financial literacy, skills, and knowledge, empirical findings are mixed, indicating different cultures of communication between countries (Moreno‐Herrero et al, 2018; Silinskas, Ahonen, et al, 2021). Moreover, previous studies have focused on the associations of family socialization factors with financial literacy skills (Silinskas, Ahonen, et al, 2021). However, this does not explain the mechanisms behind the association of parental involvement with financial literacy (e.g., the role of financial confidence).…”

“…Schools and families are often perceived as essential agents in adolescents' financial socialization (Cordero et al, 2019; Moreno‐Herrero et al, 2018). Although financial literacy skills are considered an important outcome of financial socialization, the direct relations are often empirically weak or nonexistent (e.g., Silinskas, Ahonen, et al, 2021), and the mechanisms through which financial literacy skills emerge are not well understood. Thus, empirical studies need to focus on identifying variables through which positive financial literacy outcomes might emerge.…”

“…A meta‐analysis of 126 studies reported that financial education significantly predicted financial literacy and financial behavior (Kaiser & Menkhoff, 2017). Taken together, previous studies focused on explaining how financial socialization at schools relates to financial literacy (Silinskas, Ahonen, et al, 2021), with only a few exploring the relation to confidence (Hilgert et al, 2003). However, none of them examined how financial socialization relates to financial literacy through confidence in the skills and knowledge about financial matters.…”

“…Thus, this positive link is not always found. Moreover, some studies reported negative links between parental involvement in matters of financial literacy and financial literacy skills (e.g., among Finnish adolescents in PISA 2018; Silinskas, Ahonen, et al, 2021). Interestingly, the latest PISA 2018 assessment showed that parental involvement in financial matters with their children was the lowest in Estonia and Finland (OECD, 2020).…”