leaving out other financial products and services such as loans and insurance. Finally, most research focused on adults, with only limited research on the effects on children and youth.47 This section will describe some of the recent research findings on the various component of ECE, as well as the link between ECE and access to finance. 2.3.3.1 Financial Education The OECD is a global leader of the development of policy guidance and practical tools for financial literacy as well as empirical evidence of levels of financial literacy among adult and youth. Through its Programme for International Student Assessment (PISA) it tests, amongst other topics, the financial literacy of 15-year-old students. Every three years, it provides a snapshot of financial literacy among youth. Its survey in 2012, covering 60 countries, revealed that large proportions of students have only basic skills in financial literacy. Even across the 13 participating OECD countries, 15% of students, could, at best make simple decisions about everyday spending, and recognize the purpose of everyday financial documents, such as an invoice. To be able to fully participate in economic life, these students will have to improve their financial literacy skills through increased exposure to financial education.48 Their latest survey was conducted in 2015 and the results are expected to be presented by mid-2017. The report will provide information on the development of financial literacy across OECD countries and how it is impacted by financial education, national financial education strategies and the interaction with financial access. There is a range of recent studies that show the positive effects of financial education on financial literacy and knowledge of children and youth. This conclusion rings true for formal financial education in school and other forms of education such as short, one-off educational programs and radio awareness shows. Aflatoun conducted a systematic review of the effectiveness of 21 studies on a broad range of financial education programs. The review showed that financial education is effective in improving knowledge, attitudes and behaviors. Interventions that were found to be most successful were those combining financial education with another ECE component, targeting younger children, with shorter instructional timelines. Indeed, some features have been identified as potentially having a complementing effect, such as learning while doing, and soft skills building.49 These findings are supported by a number of other studies. It has to be noted that some of them still only include adults. Whitebread and Bingham show that by the age of seven years, several basic concepts relating broadly to later ‘finance’ behaviors will typically have developed in children. 50 Luhrmann, Sera-Garcia, and Winter, for example, examined the impact of a short financial education program on teenagers aged 13-15 in German high schools. They found that the program significantly increased teenagers' interest in financial matters, but did not have evidence of an impact on savings. In addition, their financial knowledge improved, especially their ability to assess the risks related to financial assets. 51 Hospido, Villanueva, and Zamarro found that a 10-hour financial education program for 15-year-old students in Spanish high schools positively impacted the performance on financial literacy tests.52 In Brazil, Bruhn et al. found evidence of financial education’s positive impact on the financial knowledge of students and the likelihood of financial planning. It also increased the students’ savings for purchases and their participation in household financial decisions. Furthermore, the financial education program also impacted the children’s parents, who showed improvements in financial knowledge, savings, and spending behavior.53 Rodriguez, Sanchez, and Zamora demonstrated that Viva Seguro, a financial education program broadcasted via radio in Colombia covering topics that included risk and insurance management, positively impacted the financial knowledge of the audience. 54 There also appears to be a positive effect of financial education programs on long-term financial behavior. The Aflatoun review concluded that financial education has strong effects on knowledge gains and small, though significant, effects on attitudes and behavior. 55 Existing opportunities for parents, schools, and teachers to support a child’s financial capacities to defer gratification and to familiarize them with finance all aid the development of a child’s executive functions, underpinning their financial habits and behavior.56
47
Summary of findings from CYFI (2012b) OECD website 49 O’Prey & Shephard (2014) 50 The Money Advice Service (2013) 51 Luhrmann, Sera-Garcia & Winter (2013) 52 Banco de España (2015) 53 Bruhn, Zia, Legovini & Marchelli (2013) 54 Rodriguez, Sanchez and Zamora (2014) 55 O’Prey & Shephard (2014) 56 CYFI (2014) 48
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Landscape Series – Economic Citizenship Education