Financial literacy and financial education in Eastern Europe

Abstract

This chapter presents and discusses financial literacy and its key correlates in Eastern Europe. To this end, data collected through the Organisation for Economic Co-operation and Development (OECD) and Standard & Poor’s Global Financial Literacy surveys were used. The results show that financial literacy in Eastern Europe is, on average, lower than in Western Europe. There is also large heterogeneity both in overall financial literacy and its partial scores (i.e., financial knowledge, confidence, attitudes) among Eastern European countries. Data also suggest that financial literacy is differently associated with gender and age in Eastern Europe compared to Western Europe. All of these phenomena appear to be the result of different political, social, economic, and culture-related experiences in these two parts of Europe after World War II. Closure behind the Iron Curtain resulted in the fact that Eastern and Western European countries still differ, on average, in income and the amount of time the average person had to become familiar with financial products, both of which are essential for experiential learning. These differences should be accounted for in financial education programs.