Saturday, July 19, 2014

Hosting the US release of the the Programme for International Student Assessment (PISA) financial literacy data

I have not written for a long time and the reason is because of new data (only economists say these things).  I am returning to write because the data is finally out and there is a lot to report about it. I will start with the opening remarks I gave at the U.S. release of the Programme for International Student Assessment (PISA) financial literacy data, but a lot more is coming. I am so happy (I hope there are other people in the world who are happy about data!).

I am Anna Lusardi the Academic Director of the Global Financial Literacy Excellence Center, or GFLEC. We are delighted to host the US release of the PISA financial literacy assessment in collaboration with three of the most important institutions for financial literacy in the US: The Department of Education, The Department of the Treasury, and the Consumer Financial Protection Bureau.
 
We’ll be talking a lot today about the importance of financial literacy for young people. I am happy that we have many members of President Obama’s Advisory Council on Financial Capability for Young Americans here today. They join us both as speakers—including the chair of the Council—and in the audience.

For the financial literacy expert group that designed the PISA assessment, this has been a long journey. We first met in 2010 in Cambridge, Massachusetts, where I was asked to chair the group. For the next 2.5 years, we met regularly – in five different countries — to work on the assessment. And now many members of the group have traveled yet again — some from as far as New Zealand — to be here. I want to thank that work team for an exceptional collaboration. For us, this is a day of celebration.

We are at the beginning of something momentous. The new PISA data will serve as an important tool in helping us assess how much the young know and to guide programs and policies that can improve financial literacy among young people.   

To help us understand the data and how it can be used, we have Andreas Schleicher from the OECD here. Andreas, who has been in charge of PISA, travels around the world advising countries on their educational policies.  We are so fortunate to have him here today. The OECD was visionary in unveiling the PISA initiative in the year 2000, and it showed leadership again when it added financial literacy to the assessment in 2012. At GFLEC, we are very proud of our collaboration with the OECD.

Also this morning we will hear from two speakers whose financial literacy work goes back many years. Secretary of Education Arne Duncan will discuss the PISA findings together with John Rogers, the chair of the President’s Council on Financial Capability for Young Americans.  And we will hear from Richard Cordray, the Director of the Consumer Financial Protection Bureau, and Mary John Miller, the Under Secretary for Domestic Finance at the US Department of the Treasury. The word passion has come up when they speak about financial literacy.

For most of us here today, it is hard not to be passionate about this topic. Financial literacy is critically important for young people. While still in high school, students face life-changing decisions – notably about whether to continue their education and how to pay for it if they do. Financial literacy is also important for job readiness. But financial literacy may remain elusive unless we identify how – and where – financial education can achieve effective results.

There’s no question that it “takes a village” to make progress on financial literacy. That’s why I’m so pleased to have representatives from the private sector, from universities, and from other institutions join our conversation today. I know some of them are working on innovative ideas. In particular, I’m grateful to PwC for its support of this event. We will hear more this afternoon about the impressive work they are doing on financial literacy in schools.

You’ll also hear from students as the day goes on, and at the end of the day, from a surprise guest – although it might be hard to hide her all day. Who better to motivate and inspire students than a star athlete? At the George Washington University School of Business, we have a customized executive MBA program – STAR EMBA. “STAR” stands for Special Talent, Access and Responsibilities. One of our STAR “students” will join us on stage at the end of the day.

The broad impact of the PISA assessment cannot be underestimated. It has already sparked others to collect more data. McGraw Hill Financial and Gallup, for example, have launched the Global Financial Literacy Research project, which is collecting financial literacy data among adults in 148 countries. This adds data from a different age group and a larger set of countries. I’ll be working on this project, too, and I am excited about how this will enrich our understanding of financial literacy. And I would like to thank McGraw Hill Financial too for their support.

Please take note of the title of PISA’s latest volume, “Students and Money: Financial Literacy Skills for the 21st century.” Just as it was not possible to live in an industrialized society without the ability to read and write, so it is not possible to thrive in today’s world without being financially literate. 

4 comments:

Keith Whelan said...

So glad to see the U.S. media are picking up on PISA results, and especially that the findings are attracting the attention of American policy makers. It's hard to question the data, so hopefully we can start focusing on the next steps: identifying and implementing solutions.

ADLynch said...

Since we are living in a world that has shifted its focus on the financial crisis in the past few years, it is important that we give financial literacy the attention it deserves. So many Americans are living in debt whether it be credit, student loans, medical bills, but rarely do we see a solution or tips on how to get out of debt. Capital Good Fund is a nonprofit in Rhode Island that I work for and we help low income and hardworking community members better their debt by providing financial coaching and the option to obtain small loans ranging from $300-2000. We try to target people who may not have the best credit so they would get denied from a bank, and encourage individuals to stray away from predatory payday lenders who just cause people to get trapped into cycle of debt. We are working to empower people to take control of their finances and get the help they deserve to get on track to a better future. Check out our blog if you all are interest: http://cgfund.blogspot.com/

Best,
Ashley

ADLynch said...

Since we are living in a world that has shifted its focus on the financial crisis in the past few years, it is important that we give financial literacy the attention it deserves. So many Americans are living in debt whether it be credit, student loans, medical bills, but rarely do we see a solution or tips on how to get out of debt. Capital Good Fund is a nonprofit in Rhode Island that I work for and we help low income and hardworking community members better their debt by providing financial coaching and the option to obtain small loans ranging from $300-2000. We try to target people who may not have the best credit so they would get denied from a bank, and encourage individuals to stray away from predatory payday lenders who just cause people to get trapped into cycle of debt. We are working to empower people to take control of their finances and get the help they deserve to get on track to a better future. Check out our blog if you all are interest: http://cgfund.blogspot.com/

Best,
Ashley

Anonymous said...

I am a high school business and finance teacher who is fortunate enough to live in a state that requires personal finance as a graduation requirement. We have several teachers who have been offering this course for several years. Our administration has decided that, in order to allow students more opportunities to take other courses, they will require personal finance to be taken as an online course in addition to their normal course load. I have searched for data about the effectiveness of online courses on financial literacy and have found nothing. Do you have any insight or data about the effectiveness of online financial literacy instruction?