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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.

Bar chart showing percentage of 15-year-old students who frequently discuss financial topics with their parents, by topic (spending decisions, savings decisions, family budget, money for things you want to buy, and news related to economics or finance), in 2018


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).


Bar chart showing percentage of 15-year-old students who frequently discuss financial topics with their parents, by topic (spending decisions, savings decisions, family budget, money for things you want to buy, and news related to economics or finance) and gender, in 2018


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.  


Two-sided horizontal bar chart showing financial literacy score-point differences between students who frequently and infrequently discuss financial topics with their parents, after accounting for student and school characteristics, in 2018


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

NCES Releases a New Interactive Data Visualization Tool on Revenues, Expenditures, and Attendance for Public Elementary and Secondary Education

To accompany the recently released Revenues and Expenditures for Public Elementary and Secondary Education FY 2020, NCES has created an interactive data visualization tool to highlight the per pupil revenues and expenditures (adjusted for inflation) and average daily attendance (ADA) trends from the fiscal year (FY) 2020 National Public Education Financial Survey.

This tool allows users to see national or state-specific per pupil amounts and year-to-year percentage changes for both total revenue and current expenditures by using a slider to toggle between the two variables. Total revenues are shown by source, and total current expenditures are shown by function and subfunction. Clicking on a state in the map will display data for the selected state in the bar charts.

The tool also allows users to see the ADA for each state. It is sortable by state, ADA amount, and percentage change. It may also be filtered to easily compare selected states. Hovering over the ADA of a state will display another bar graph with the last 3 years of ADA data.

Revenues and Expenditures

Between FY 2019 and FY 2020, inflation-adjusted total revenues per pupil increased by 1.8 percent (to $15,711). Of these total revenues for education in FY 2020, the majority were provided by state and local governments ($7,461 and $7,056, respectively).

The percentage change in revenues per pupil from FY 2019 to FY 2020 ranged from +15.4 percent in New Mexico to -2.4 percent in Kentucky. Total revenues per pupil increased in 38 states and the District of Columbia and decreased in 12 states between FY 2019 and FY 2020.


[click to enlarge image]Image of revenues tab of the Finance Visualization Tool showing revenues per pupil for public elementary and secondary education in FY 2019 and FY 2020


In FY 2020, current expenditures per pupil for the United States were $13,489, up 0.5 percent from FY 2019, after adjusting for inflation. Current expenditures per pupil ranged from $8,287 in Utah to $25,273 in New York. After New York, current expenditures per pupil were highest in the District of Columbia ($23,754), Vermont ($22,124), New Jersey ($21,385), and Connecticut ($20,889). After Utah, current expenditures per pupil were lowest in Idaho ($8,337), Arizona ($8,694), Oklahoma ($9,395), and Nevada ($9,548).

The states with the largest increases in current expenditures per pupil from FY 2019 to FY 2020, after adjusting for inflation, were New Mexico (+9.3 percent), Illinois (+5.7 percent), Kansas (+4.0 percent), Texas (+3.7 percent), and Indiana (+3.7 percent). The states with the largest decreases were Delaware1 (-12.8 percent), Connecticut (-2.7 percent), Arizona (-2.4 percent), Alaska (-2.0 percent), and Arkansas (-1.9 percent).

Average Daily Attendance (ADA)

During FY 2020, many school districts across the country closed their school buildings for in-person learning and began providing virtual instruction in an effort to prevent the spread of COVID-19. In order to collect the most consistent and measurable data possible, the U.S. Department of Education provided flexibility for states to report average daily attendance data for the 2019–20 school year.

Between FY 2019 and FY 2020, ADA decreased in 14 states, with the largest decrease at 2.4 percent in New Mexico. ADA increased in the remaining 36 states and the District of Columbia, with the largest increase at 4.1 percent in South Dakota. In 43 states, the ADA in FY 2020 was within 2 percent of the previous year’s ADA.


[click to enlarge image]

Image of Average Daily Attendance tab of the Finance Visualization Tool showing average daily attendance for public elementary and secondary education by state in FY 2020


To explore these and other data on public elementary and secondary revenues, expenditures, and ADA, check out our new data visualization tool.

Be sure to follow NCES on TwitterFacebookLinkedIn, and YouTube and subscribe to the NCES News Flash to stay up-to-date on the latest from the National Public Education Financial Survey.

 

By Stephen Q. Cornman, NCES, and Malia Howell and Jeremy Phillips, U.S. Census Bureau


[1] In Delaware, the decline in current expenditures per pupil is due primarily to a decrease in the amount reported for employee benefits paid by the state on behalf of local education agencies (LEAs). The state reviewed this decline and provided corrected data that will be published in the final file.

Public Charter School Expenditures by School Level

How do we achieve the best education results for the best price? This is a central question among researchers and policymakers alike. In this blog post, we share outcomes from school year 2017–18 concerning public charter school spending at the elementary, middle, and high school levels to help inform the discussion on charter school costs and benefits to the broader education system.

The first modern charter law in the United States was passed in Minnesota in 1991. Since that time, the number of charter schools has grown tremendously as an option in public elementary and secondary education. In 2017–18, the United States had 7,086 public charter schools in 44 states and the District of Columbia. In a decade, from 2007–08 to 2017–18, the number of public charter schools in the United States increased more than 70 percent, representing a little more than 7 percent of all public schools at the end of this time period (figure 1).


Figure 1. Number of public charter schools in the United States: School years 2007–08 through 2017–18

Line graph showing the number of public charter schools in the United States for school years 2007–08 through 2017–18

NOTE: These data include counts of operational public elementary/secondary charter schools for the 50 states and the District of Columbia.
SOURCE: U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), 2007–08 through 2017–18.


Nearly half (47 percent) of all public charter schools in the United States are classified as elementary schools, 11 percent are classified as middle schools, and 28 percent are classified as high schools (figure 2). The remainder (14 percent) have other grade-level configurations and do not fall into any of these categories.


Figure 2. Percentage of public charter schools in the United States, by school level: School year 2017–18

Pie chart showing percentage of public charter schools in the United States, by school level (elementary, middle, high, and other) for school year 2017–18

NOTE: These data reflect operational public elementary/secondary charter schools for the 50 states and the District of Columbia from the Common Core of Data (CCD) for 2017. School-level categories are taken from the Documentation to NCES’ Common Core of Data for school year 2017–18, whereby “Elementary” includes schools with students enrolled in grades K–4 that offer more elementary grades than middle grades; “Middle” includes schools with students enrolled in grades 5–8 that offer more middle grades than elementary or secondary grades; “High” includes schools with students enrolled in grade 12 and other secondary grades that offer more high grades than middle grades; and “Other” includes schools with both elementary and high grades or grades at all three levels (elementary, middle, and high). Excludes 2,360 schools categorized in the CCD as adult education, not applicable, not reported, prekindergarten-only, secondary, and ungraded.
SOURCE: U.S. Department of Education, National Center for Education Statistics, Civil Rights Data Collection (CRDC), 2017–18.


According to expenditure data captured in the Civil Rights Data Collection (CRDC), public schools in the United States spent $330.94 billion in 2017–18, or more than $6,600 per pupil. Reports of national school expenditures based on data from the CRDC are significantly lower than those estimated using the National Public Education Financial Survey (NPEFS) from the Common Core of Data (CCD). This could be attributed to data on spending for school nutrition, operations and maintenance, and transportation being captured in the NPEFS but not collected in the CRDC. However, the CRDC data allow for comparisons of public charter and noncharter schools at the school level. In 2017–18, spending among public noncharter schools fell just under the national average of $6,500 per pupil. Like other schools in the U.S. public school system, charter schools do not charge tuition and instead receive district and state funding based on their enrollment. Public charter schools spent more than $26.83 billion in 2017–18, or just more than $8,900 per pupil, thus exceeding the national average.

The per pupil school expenditures of public charter schools across school levels1 are different from those of public noncharter schools. This analysis compares spending between public elementary, middle, and high schools in 2017–18. (Mixed-level and other schools are excluded because they have variable grade levels and other characteristics that can make expenditures incomparable across school types.) Across school levels, per pupil expenditures among public charter schools exceeded the national average, while per pupil expenditures among public noncharter schools were closer to the national average. Specifically, for public charter schools, per pupil expenditures were highest for elementary schools ($8,400), followed by high schools ($8,200) and middle schools ($8,100) (figure 3). However, for public noncharter schools, per pupil expenditures were highest for high schools ($6,600), followed by elementary schools ($6,400) and middle schools ($6,100).


Figure 3. Per pupil public school expenditures, by public charter school status and school level: School year 2017–18  

Horizontal stacked bar chart showing per pupil public school expenditures, by public charter school status and school level, for school year 2017–18

 

NOTE: Rounded to nearest multiple of 100. Analytical universe restricted to charter schools in both the CRDC and CCD that could be linked or matched using unique identification numbers.
SOURCE: U.S. Department of Education, National Center for Education Statistics, Civil Rights Data Collection (CRDC), 2017–18.


The CRDC splits school expenditures into personnel or staff expenditures (e.g., salaries of teachers and of instructional, support, and administrative staff) and nonpersonnel expenditures (e.g., the cost of books, computers, instructional supplies, and professional development for teachers). (Nonpersonnel expenditures do not include those for school nutrition, operations, maintenance, or transportation to and from school.) Figures 4 and 5 show that across school levels in 2017–18, both public charter and noncharter schools tended to spend more per pupil on salaries and less per pupil on nonpersonnel expenditures. The differences between public charter and noncharter schools are particularly noticeable in comparisons of nonpersonnel expenditures, where charter schools spent considerably more per pupil than noncharter schools, most prominently at the elementary school level ($3,400 vs. $800). The figures also show that among public charter schools, middle schools had higher salary expenditures but lower nonpersonnel expenditures than did elementary or high schools. These findings demonstrate the importance of considering school level when examining public charter school spending.


Figure 4. Per pupil public school salary expenditures, by public charter school status and school level: School year 2017–18

Horizontal stacked bar chart showing per pupil public school salary expenditures, by public charter school status and school level, for school year 2017–18

NOTE: Rounded to nearest multiple of 100. Analytical universe restricted to charter schools in both the CRDC and CCD that could be linked or matched using unique identification numbers.
SOURCE: U.S. Department of Education, National Center for Education Statistics, Civil Rights Data Collection (CRDC), 2017–18.


Figure 5. Per pupil public school nonpersonnel expenditures, by public charter school status and school level: School year 2017–18

Horizontal stacked bar chart showing per pupil public school nonpersonnel expenditures, by public charter school status and school level, for school year 2017–18

NOTE: Rounded to nearest multiple of 100. Analytical universe restricted to charter schools in both the CRDC and CCD that could be linked or matched using unique identification numbers.
SOURCE: U.S. Department of Education, National Center for Education Statistics, Civil Rights Data Collection (CRDC), 2017–18.


Thoughts for Future Research

Since 2009, the CRDC—a mandatory data collection—has collected school expenditure data from elementary and secondary public schools and school districts. The 2017–18 findings suggest that public charter schools spent nearly 200 to 300 percent more on nonpersonnel expenditures per pupil than did public noncharter schools. However, there are concerns about districts’ ability to accurately report school expenditure data, including those for public charter schools. While the CRDC is currently the only complete national database of school-level spending, the CCD has partial school-level fiscal data for about 30 states, and NCES is making an effort to increase this voluntary reporting. Future studies could include a more targeted analysis of spending among public charter schools by geographic settings, student enrollee characteristics, school size, and school type.

Civil Rights Data Collection

Since 1968, the U.S. Department of Education has collected data on key education and civil rights issues in our nation’s public schools. The CRDC collects a variety of information, including data on student enrollment and educational programs and services, most of which is disaggregated by race/ethnicity, sex, limited English proficiency, and disability. The CRDC informs the Office of Civil Rights’ overall strategy for administering and enforcing the civil rights statutes for which it is responsible. The CRDC collects data only from public schools (i.e., no data are collected from private schools). The CRDC data files can be found here: https://ocrdata.ed.gov/.

 

By Jennifer Hudson, Ph.D., and Jennifer Sable (AIR) and Christopher D. Hill, Ph.D. (NCES)


[1] For the purposes of this blog post, school-level categories are taken from the Documentation to NCES’ Common Core of Data for SY 2017–18:  “Elementary” includes schools with students enrolled in grades K through 4 that offer more elementary grades than middle grades. “Middle” includes schools with students enrolled in grades 5 through 8 that offer more middle grades than elementary or secondary grades. “High” include schools with students enrolled in grade 12 and other secondary grades that offer more high grades than middle grades.  “Other” includes schools with both elementary and high grades or grades at all three levels (elementary, middle, and high).

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

New Report on the Effects of the Coronavirus Pandemic on Undergraduate Student Experiences in Spring 2020

NCES recently released a report on the experiences of undergraduate students early in the COVID-19 pandemic. The report uses early release data from the 2019–20 National Postsecondary Student Aid Study (NPSAS:20) to describe how the pandemic disrupted students’ enrollment, housing, and finances in the spring of 2020. It also discusses how institutions helped students with these issues.

NPSAS:20 student surveys started in March 2020, and items about the COVID-19 pandemic were added in April 2020 to collect information about the effects of the pandemic on students’ educational experiences between January 1 and June 30, 2020. These early release data do not include students who answered before the pandemic questions were added. The data show that 87 percent of students had their enrollment disrupted or changed during this time. Students who experienced disruptions may have withdrawn or taken a leave of absence, had an extended school break, had changes made to their study-abroad program, or had classes cancelled or moved online.

Twenty-eight percent of students had a housing disruption or change, and 40 percent had a financial disruption or change. Students who had a housing disruption had to move or had difficulty finding safe and stable housing. Students who had a financial disruption may have lost a job or income or may have had difficulty getting food; they may have also received financial help from their postsecondary institutions.

The report also provides information about the experiences of students with different characteristics. For example, students with Pell Grants had a similar rate of enrollment disruption (87 percent) as those without them (88 percent). Those with Pell Grants had a lower rate of housing disruption (23 percent) than those without them (31 percent). However, they had a higher rate of financial disruption (48 percent) than their peers without Pell Grants (34 percent).


Figure 1. Percentage of undergraduates who experienced enrollment, housing, or financial disruptions or changes at their institution due to the COVID-19 pandemic, by Pell Grant recipient status: Spring 2020

SOURCE: U.S. Department of Education, National Center for Education Statistics, 2019–20 National Postsecondary Student Aid Study (NPSAS:20, preliminary data).


The final NPSAS:20 raw data will be available in late 2022. Sign up for the IES Newsflash to receive announcements about NCES data products.

 

By Tracy Hunt-White