Factors that influence the level of financial literacy among young people: The role of parental engagement and students' experiences with money matters

Abstract

This paper focused on the family as context for financial socialization and students' experiences with money matters to explain the acquisition of financial knowledge of young people in fifteen OECD countries and economies. We used data from the second OECD PISA financial literacy assessment in 2015. Multilevel regressions of students' performance in financial literacy were presented. When explaining financial literacy differences across countries a significant predictor of financial literacy was a well-functioning educational system proxied in our study by the quality of its mathematical and scientific education. After accounting for performance in mathematics and reading and other variables, estimates of multilevel regressions by country showed that students' financial literacy was associated mainly with understanding the value of saving and discussing money matters with parents. In some countries, exposure to (and the use of) financial products – in particular, holding a bank account – improved students' financial knowledge as well.