The results of the global OECD PISA 2018 financial literacy assessment of students were released today, with Estonian students ranking 1st among the 20 countries participating in the assessment. As many as 95% of 15-year-old students in Estonia have basic knowledge of money matters – an area in which their results have improved greatly in the last six years.
The financial literacy assessment focused on young people’s understanding of money matters and their awareness of the risks associated with them, as well as how that knowledge can be used to improve their own financial well-being and that of society.
Minister of Education and Research Mailis Reps says that the national economy and people’s continued well-being will largely depend on the financial decisions of today’s youngsters make in the years to come. “It is important to support our students’ initiative, for example, establishing student companies, that provide them with important skills and experiences already in school. Our 15-year-olds are very bright and we must be thankful for those who also support them – teachers, families, entrepreneurs and others,” she added
“Being financially literate provides better decisions in the future, thus it is the one of the most important skill and competence in the modern society,” affirmed Gunda Tire, the PISA coordinator in Estonia and chief specialist of the Foundation Innove.
Participation in the PISA assessment enables the level of skills and knowledge among Estonian students to be compared to that of their peers in other countries. A total of 117,000 students from 20 countries took part in PISA’s financial literacy survey in 2018. This included 5371 youngsters from Estonia, of whom 4000 (75%) took the test in Estonian and 1371 (25%) in Russian.
The average score for Estonia was 547, which is significantly higher than the OECD average of 505. This put Estonian students in 1st place, with their peers in Finland and Canada ranking 2nd and 3rd overall (with 537 points and 532 points, respectively). Among other neighbouring countries, Latvian students were ranked 8th with a score of 501; Lithuanian students were ranked 9th with a score of 498; and Russian students were ranked 10th with a score of 495.
Estonia’s results show that youngsters in the country have good fundamental knowledge of money matters: the base level of the assessment was achieved by 95% of the students. The financial smarts of young people in Estonia depend very little on the socioeconomic backgrounds of their families and schools. Moreover, there is little difference between boys and girls and between young people living in cities vs those living in rural areas. This indicates that Estonian youth are on a more even footing in terms of achieving financial literacy than youngsters in other countries.
The average result of students from schools with Estonian as the language of instruction was 46 points higher than that of students from schools with Russian as the language of instruction (560 vs 514). The financial knowledge of students from schools with Russian as the language of instruction has improved over the last six years and is better than the OECD average. The results of students from such schools in Estonia are on par with the average result of students in Australia, Portugal and the United States.
PISA assessments have shown that the skills and knowledge of Estonian students in mathematics and reading are among the best in the world, which unquestionably serves as a strong foundation for the development of financial smarts. However, the financial literacy assessment indicates that those who read about money matters in textbooks for different subjects achieve better results overall. Estonian youngsters obtain information about money matters first and foremost from their parents and other people close to them (95%) and from the Internet (82%). On the whole, little attention is given to money-related issues in Estonian families: for example, 40% of young people claim never to have discussed budget issues or financial news with family members.
Estonian students are highly independent when it comes to organising their money matters: 87% decide for themselves what they spend their money on; 82% take responsibility for their own money matters; 75% have a bank card; and 51% do work for which they are paid.
Good financial literacy among young people does not necessarily result in smart behaviour as adults. As such, it is important to encourage youngsters to also pay attention to their financial behaviour in the future. Estonian youngsters ranked 3rd in the 2012 PISA assessment, but just three years later, having attained adulthood, less than half planned their money matters more than a month in advance, and around half had not saved any money in the preceding 12 months.
Financial literacy is promoted in Estonia via the Public Programme for the Development of Financial Literacy led by the Ministry of Finance. A follow-up programme is currently being devised in cooperation with public- and private-sector partners for launch in 2021.