Influence of Factors Promoting Financial Literacy on the Achievements of Financial Literacy of Students in Latvia

Abstract

The literature suggests that financial literacy depends on factors such as socioeconomic status/sociodemographic status, psychosocial and psychological factors, experience, and access to financial education, language skills, mathematical literacy and other factors. The aim of this study was to identify the factors that influence the financial literacy achievements of students from Latvia, focusing on the possibility to improve these achievements. The data analysis was performed with PISA 2018 Latvian data, which there were selected 25% of the participating students whose financial literacy performance was lower than the mean performance in mathematical and reading literacy and 25% of students whose financial literacy performance was considerably higher than the mean performance in mathematical literacy and reading literacy. Differences between these two groups showed factors that impact financial literacy achievements, excluding the possibility that the financial literacy performance of these students was high due to the mathematical and reading literacy. It was concluded that the financial achievements of students in Latvia are positively influenced by such factors as the socioeconomic status/sociodemographic status, psychosocial factors, and psychological factors (students with higher financial literacy achievements have a more negative attitude towards school but a more positive attitude towards life, less fear of failure and more a positive attitude towards competition, and clear plans for the future), accessibility of the financial education, time devoted to financial education, an accessible wide range of financial topics in education, experience in the financial environment, parents’ involvement, feedback from teachers in reading lessons. Keywords: Achievements of financial literacy, Financial Literacy, Mathematic literacy, OECD PISA 2018, Reading literacy.