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Institute of Education Sciences

Money Matters: Exploring Young Adults’ Financial Literacy and Financial Discussions With Their Parents

Financial literacy is a critical skill for young adults—especially as they begin to enter college or the workforce—that is often needed for partial or full financial independence and increased financial decision making.

The Program for International Student Assessment (PISA)—which is coordinated by the Organization for Economic Cooperation and Development (OECD)—gives us a unique opportunity to analyze and understand the financial literacy of 15-year-olds in the United States and other education systems around the world. PISA is the only large-scale nationally representative assessment that measures the financial literacy skills of 15-year-olds. The financial literacy domain was administered first in 2012 and then in 2015 and 2018. The 2018 financial literacy cycle assessed approximately 117,000 students, representing about 13.5 million 15-year-olds from 20 education systems. The fourth cycle began in fall 2022 in the United States and is currently being conducted.


How Frequently Do Students Discuss Financial Topics With Their Parents?

In 2018, all education systems that administered the PISA financial literacy assessment also asked students to complete a questionnaire about their experiences with money matters in school and outside of school. In the United States, about 3,500 students out of the total 3,740 U.S. PISA sample completed the questionnaire.

This blog post explores how frequently students reported talking about the following five topics with their parents (or guardians or relatives):

  1. their spending decisions
  2. their savings decisions
  3. the family budget
  4. money for things they want to buy
  5. news related to economics or finance

Students’ answers were grouped into two categories: frequent (“a few times a month” or “once a week or more”) and infrequent (“never or almost never” or “a few times a year”).

We first looked at the degree to which students frequently discussed various financial topics with their parents. In 2018, the frequency of student-parent financial discussions varied by financial topic (figure 1):

  • About one-quarter (24 percent) of U.S. 15-year-old students reported frequently discussing with their parents news related to economics or finance.
  • More than half (53 percent) of U.S. 15-year-old students reported frequently discussing with their parents money for things they wanted to buy.


Do male and female students differ in how frequently they discuss financial topics with their parents?

In 2018, higher percentages of female students than of male students frequently discussed with their parents the family budget (35 vs. 32 percent) and money for things they wanted to buy (56 vs. 50 percent). Meanwhile, a lower percentage of female students than of male students frequently discussed with their parents news related to economics or finance (21 vs. 26 percent) (figure 2).



Are Students’ Financial Literacy Scores Related to How Frequently They Discuss Financial Matters With Their Parents?

With a scale from 0–1,000, the PISA financial literacy assessment measures students’ financial knowledge in four content areas:

  1. money and transactions
  2. planning and managing finances
  3. risk and reward
  4. the financial landscape

In 2018, the average score of 15-year-old students ranged from 388 points in Indonesia to 547 points in Estonia. The U.S. average (506 points) was higher than the average in 11 education systems, lower than the average in 4 education systems, and not measurably different from the average in 4 education systems. The U.S. average was also not measurably different from the OECD average.

We also examined the relationship between frequent parent–student financial discussions and students’ financial literacy achievement (figure 3). After taking into account students’ gender, race/ethnicity, immigration status, and socioeconomic status—as well as their school’s poverty and location—the results show that students who reported frequently discussing spending decisions with their parents scored 16 points higher on average than did students who reported infrequently discussing this topic. On the other hand, students who reported frequently discussing news related to economics or finance with their parents scored 18 points lower on average than did students who reported infrequently discussing this topic.  



Do Students Think That Young Adults Should Make Their Own Spending Decisions?

We also explored whether students agreed that young people should make their own spending decisions. In 2018, some 63 percent of U.S. 15-year-old students reported they agreed or strongly agreed, while 37 percent reported that they disagreed.

Do male and female students differ in their agreement that young adults should make their own spending decisions?

When comparing the percentage of male versus female students, we found that a lower percentage of female students than of male students agreed or strongly agreed that young people should make their own spending decisions (59 vs. 66 percent). This pattern held even after taking into account students’ gender, race/ethnicity, immigration status, and socioeconomic status as well as school poverty and location.  


Upcoming PISA Data Collections

A deeper understanding of the frequency of parent–student financial conversations, the types of topics discussed, and the relationships between financial topics and financial literacy could help parents and educators foster financial literacy across different student groups in the United States.

PISA began collecting data in 2022 after being postponed 1 year due to the COVID-19 pandemic; 83 education systems are expected to participate. The PISA 2022 Financial Literacy Assessment will include items from earlier years as well as new interactive items. The main PISA results will be released in December 2023, and the PISA financial literacy results will be released in spring/summer 2024.

Be sure to follow NCES on TwitterFacebookLinkedIn, and YouTube and subscribe to the NCES News Flash to receive notifications when these new PISA data are released.

 

By Saki Ikoma, Marissa Hall, and Frank Fonseca, AIR

Program for the International Assessment of Adult Competencies (PIAAC) 2022–23 Data Collection Begins

Last month, the National Center for Education Statistics (NCES) kicked off a major survey of adults (ages 16–74) across the nation to learn about their literacy skills, education, and work experience. Information collected through this survey—officially known as Cycle 2 of the Program for the International Assessment of Adult Competencies (PIAAC) in the United States—is used by local, state, and national organizations, government entities, and researchers to learn about adult skills at the state and local levels (explore these data in the PIAAC Skills Map, shown below).


Image of PIAAC Skills Map on state and county indicators of adult literacy and numeracy


Specifically, these data are used to support educational and training initiatives organized by local and state programs. For example, the Houston Mayor’s Office for Adult Literacy has used the PIAAC Skills Map data in developing the Adult Literacy Blueprint, a comprehensive plan for coordinated citywide change to address the systemic crisis of low literacy and numeracy in the city. In addition, the Kentucky Career and Technical College System developed a comprehensive data-driven app for workforce pipeline planning using the county-level PIAAC Skills Map data as one of the education pipeline indicators.

This is not the first time NCES is administering PIAAC. NCES collected PIAAC data three times between 2011 and 2017, when the first cycle of this international study was administered in 39 countries. Developed by the Organization for Economic Cooperation and Development (OECD), PIAAC measures fundamental cognitive and workplace skills needed for individuals to participate in society and for economies to prosper. Among these fundamental skills are literacy, numeracy, and digital problem-solving. Data from the first cycle of PIAAC (2011–17) provided insights into the relationships between adult skills and various economic, social, and health outcomes—both across the United States as a whole and for specific populations of interest (e.g., adults who are women, immigrants, older, employed, parents, or incarcerated). The OECD and NCES have published extensively using these data.

The current cycle (Cycle 2) of PIAAC will resemble the first cycle in that interviewers will visit people’s homes to ask if they are willing to answer background questionnaire and take a self-administered test of their skills. However, unlike the first cycle when respondents could respond to the survey on paper or on a laptop, this cycle will be conducted entirely on a tablet. PIAAC is completely voluntary, but each respondent is specifically selected to provide invaluable information that will help us learn about the state of adult skills in the country (participants can also receive an incentive payment for completing the survey).

PIAAC’s background questionnaire includes questions about an individual’s demographics, family, education, employment, skill use, and (new in Cycle 2 and unique to the United States) financial literacy. The PIAAC test or “direct assessment” measures literacy, numeracy, and (new in Cycle 2) adaptive problem-solving skills of adults.1

Each sampled person’s response is not only kept confidential but also “anonymized” before the data are released (so that no one can ever definitively identify an individual from personal characteristics in the datafile).

The international report and data for PIAAC Cycle 2 is scheduled to be released by the OECD in December 2024.

Be sure to follow NCES on TwitterFacebookLinkedIn, and YouTube and subscribe to the NCES News Flash to stay up-to-date on PIAAC report and data releases and resources.

 

By Saida Mamedova, AIR, Stephen Provasnik, NCES, and Holly Xie, NCES


[1] Data is collected from adults ages 16–74 in the United States and ages 16–65 in the other countries.

Education at a Glance 2021: Putting U.S. Data in a Global Context

International comparisons provide reference points for researchers and policy analysts to understand trends and patterns in national education data and are important as U.S. students compete in an increasingly global economy.

Education at a Glance, an annual publication produced by the Organization for Economic Cooperation and Development (OECD), provides data on the structure, finances, and performance of education systems in 38 OECD countries, including the United States, as well as a number of OECD partner countries. The report also includes state-level information on key benchmarks to inform state and local policies on global competitiveness.

The recently released 2021 edition of the report shows that the United States is above the international average on some measures, such as participation in and funding of postsecondary education, but lags behind in others, such as participation in early childhood education programs. The report also presents some initial comparisons on countries’ responses to the COVID-19 pandemic.

Postsecondary Educational Attainment

The percentage of U.S. 25- to 34-year-olds with a postsecondary degree increased by 10 percentage points between 2010 and 2020, reaching 52 percent, compared with the OECD average of 45 percent (figure 1). Attainment rates varied widely across the United States in 2020, from 33 percent for those living in Nevada to 61 percent for those living in Massachusetts and 77 percent for those living in the District of Columbia.


Figure 1. Percentage of 25- to 34-year-olds with a postsecondary degree, by Organization for Economic Cooperation and Development (OECD) country: 2020

1 Year of reference differs from 2020. Refer to the source table for more details.
SOURCE: OECD (2021), Table A1.2. See Source section for more information and Annex 3 for notes.


In the United States in 2020, 25- to 34-year-old women were more likely than 25- to 34-year-old men to attain a postsecondary education: 57 percent of women had a postsecondary qualification, compared with 47 percent of men, a difference of 10 percentage points. Across OECD countries, the postsecondary education gap between 25- to 34-year-old men and women was wider (13 percentage points) than the gap in the United States (10 percentage points). In 2020, the postsecondary attainment rate of 25- to 34-year-old men in the United States was 8 percentage points higher than the OECD average, whereas the rate of 25- to 34-year-old women in the United States was 5 percentage points higher than the OECD average.

Postsecondary Education Spending

U.S. spending on postsecondary education is also relatively high compared with the OECD average, in both absolute and relative terms. The United States spent $34,036 per postsecondary student in 2018, the second-highest amount after Luxembourg and nearly double the OECD average ($17,065). Also, U.S. spending on postsecondary education as a percentage of GDP (2.5 percent) was substantially higher than the OECD average (1.4 percent). These total expenditures include amounts received from governments, students, and all other sources.

Early Childhood Education

The level of participation in early childhood education programs in the United States is below the OECD average and falling further behind. Between 2005 and 2019, average enrollment rates for 3- to 5-year-olds across OECD countries increased from 77 to 87 percent. In contrast, the rate in the United States remained stable at 66 percent during this time period. Among U.S. states, the 2019 enrollment rates for 3- to 5-year-olds ranged from less than 50 percent in Idaho and North Dakota to 70 percent or more in New York (70 percent), Vermont (76 percent), Connecticut (76 percent), New Jersey (77 percent), and the District of Columbia (88 percent).

COVID-19 Pandemic

Education at a Glance also presents a first look at countries’ responses to the COVID-19 pandemic. The spread of COVID-19 impeded access to in-person education in many countries around the world in 2020 and 2021. By mid-May 2021, 37 OECD and partner countries had experienced periods of full school closure since the start of 2020.

Despite the impact of the crisis on employment, the share of NEETs (those neither in employment nor education or training) among 18- to 24-year-olds did not greatly increase in most OECD and partner countries during the first year of the COVID-19 crisis. On average, the share of 18- to 24-year-old NEETs in OECD countries rose from 14.4 percent in 2019 to 16.1 percent in 2020. However, Canada, Columbia, and the United States experienced an increase of more than 4 percentage points. In the United States, the share of 18- to 24-year-old NEETs increased from 14.6 percent in 2019 to 19.3 percent in 2020.

In 2020, many postsecondary education institutions around the world closed down to control the spread of the COVID-19 pandemic, potentially affecting more than 3.9 million international and foreign students studying in OECD countries. Early estimates show the percentage of international students attending postsecondary institutions in the United States declined by 16 percent between 2020 and 2021.

Browse the full report to see how the United States compares with other countries on these and other important education-related topics and learn more about how other countries’ education systems responded to the COVID-19 pandemic.

 

By Rachel Dinkes, AIR

Announcing the Condition of Education 2020 Release

NCES is pleased to present The Condition of Education 2020, an annual report mandated by the U.S. Congress that summarizes the latest data on education in the United States. This report uses data from across the center and from other sources and is designed to help policymakers and the public monitor educational progress. This year’s report includes 47 indicators on topics ranging from prekindergarten through postsecondary education, as well as labor force outcomes and international comparisons.

The data show that 50.7 million students were enrolled in public elementary and secondary schools (prekindergarten through grade 12) and approximately 5.7 million students were enrolled in private elementary and secondary schools in fall 2017, the most recent year for which data were available. In school year 2017–18, some 85 percent of public high school students graduated on time with a regular diploma. This rate was similar to the previous year’s rate. About 2.2 million, or 69 percent, of those who completed high school in 2018, enrolled in college that fall. Meanwhile, the status dropout rate, or the percentage of 16- to 24-year-olds who were not enrolled in school and did not have a high school diploma or its equivalent, was 5.3 percent in 2018.

Total undergraduate enrollment in degree-granting postsecondary institutions in 2018 stood at 16.6 million students. The average net price of college for first-time, full-time undergraduates attending 4-year institutions was $13,700 at public institutions, $27,000 at private nonprofit institutions, and $22,100 at private for-profit institutions (in constant 2018–19 dollars). In the same year, institutions awarded 1.0 million associate’s degrees, 2.0 million bachelor’s degrees, 820,000 master’s degrees, and 184,000 doctor’s degrees.

Ninety-two percent of 25- to 34-year-olds in the United States had a high school diploma or its equivalent in 2018. In comparison, the average rate for the Organization for Economic Cooperation and Development (OECD) member countries was 85 percent. Some 49 percent of these individuals in the United States had obtained a postsecondary degree, compared with the OECD average of 44 percent. Similar to previous years, annual median earnings in 2018 were higher for 25- to 34-year-olds with higher levels of education. In 2018, U.S. 25- to 34-year-olds with a bachelor’s or higher degree earned 66 percent more than those with a high school diploma or equivalent.

The Condition of Education includes an Executive Summary, an At a Glance section, a Reader’s Guide, a Glossary, and a Guide to Sources, all of which provide additional background information. Each indicator includes references to the source data tables used to produce the indicator.

As new data are released throughout the year, indicators will be updated and made available on The Condition of Education website

In addition to publishing The Condition of Education, NCES produces a wide range of other reports and datasets designed to help inform policymakers and the public about significant trends and topics in education. More information about the latest activities and releases at NCES may be found on our website or at our social media sites on TwitterFacebook, and LinkedIn.

 

By James L. Woodworth, NCES Commissioner

New International Data Highlight Experiences of Teachers and Principals

The Teaching and Learning International Survey (TALIS) 2018 surveyed lower secondary teachers and principals in the United States and 48 other education systems (in the United States, lower secondary is equivalent to grades 7–9). Following the release of volume 1 of the TALIS 2018 U.S. highlights web report in 2019, volume 2 provides new data comparing teachers’ and principals’ opinions about job satisfaction, stress, salary, and autonomy.

According to the survey results, nearly a quarter of U.S. lower secondary teachers (26 percent) reported they had “a lot” of stress in their work. This was higher than the average across countries participating in TALIS (16 percent) (figure 1). The U.S. percentage was higher than the percentage in 35 education systems, lower than the percentage in 3 education systems, and not measurably different from the percentage in 10 education systems. Across educations systems, the percentage of teachers who reported experiencing “a lot” of stress in their work ranged from 1 percent in the country of Georgia to 38 percent in England (see figure 8T in the TALIS 2018 U.S. highlights web report, volume 2).


Figure 1. Percentage of lower secondary teachers in the United States and across TALIS education systems reporting that they experience “a lot” of stress in their work: 2018


Less than half of U.S. lower secondary teachers (41 percent) “agree” or “strongly agree” that they are satisfied with their salary, which was not measurably different from the TALIS average (39 percent) (figure 2). The U.S. percentage was higher than the percentage in 22 education systems, lower than the percentage in 17 education systems, and not measurably different from the percentage in 9 education systems. The percentage of teachers who “agree” or “strongly agree” that they are satisfied with their salary ranged widely across education systems, from 6 percent in Iceland to 76 percent in Alberta–Canada (see figure 10T in the TALIS 2018 U.S. highlights web report, volume 2).

About half of U.S. lower secondary principals (56 percent) “agree” or “strongly agree” that they are satisfied with their salary, which was not measurably different from the TALIS average (47 percent) (figure 2). The U.S. percentage was higher than the percentage in 15 education systems, lower than the percentage in 3 education systems, and not measurably different from the percentage in 29 education systems. As with teachers, the percentage of principals who “agree” or “strongly agree” that they are satisfied with their salary ranged widely across education systems, from 17 percent in Italy to 86 percent in Singapore (see figure 10P in the TALIS U.S. highlights web report, volume 2).


Figure 2. Percentage of lower secondary teachers and principals in the United States and across TALIS education systems who “agree” or “strongly agree” that they are satisfied with the salary they receive for their work: 2018


TALIS is conducted in the United States by the National Center for Education Statistics (NCES) and is sponsored by the Organization for Economic Cooperation and Development (OECD), an intergovernmental organization of industrialized countries. Further information about TALIS can be found in the technical notes, questionnaires, list of participating OECD and non-OECD countries, and FAQs for the study. In addition, the two volumes of the OECD international reports are available on the OECD TALIS website.

 

By Tom Snyder, AIR; Ebru Erberber, AIR; and Mary Coleman, NCES