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OECD/INFE tools for cross- country surveys of financial literacy
Adele Atkinson, PhDPolicy Analystadele.atkinson@oecd.orgwww.financial-education.org
With the support of the Russian/World Bank/OECD Trust Fund
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Outline
• Questionnaire development– the development process– questionnaire content
• Data collection– Final list of pilot countries
• Data analysis and results– Some highlights: for more see the paper!
• Conclusions, outputs and future plans
3
Questionnaire development process
Survey of INFE
members: identify
questions, survey
approaches, analysis methods
Develop, discuss,
refine and pilot a
questionnaire
Analyse the pilot
data, collect
feedback from pilot countries
Finalise the questionnaire and make available for widespread
use
2008/9 2010 2010/112011/12
Questionnaire content
Behaviour 9 Q
Keeping track of money
Making ends meet
Choosing and using products
Short and long term planning
Knowledge8 Q
Simple and compound
interest
Inflation- time value of money
Risk and return
Risk diversification
Attitudes 4 Q
Propensity to save vs
spend
Time preference (present vs
future)
Risk preference
(explanatory variable)
Financial inclusion
Awareness of products
Holding and using
products
Savings habits
Socio-demographic information
Age
Gender
Education
Work
Income4
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Data collection
Invite INFE members to pilot
the questionnaire
Countries translate, test and use questionnaire in large scale pilot
OECD collect data from pilot countries
and create a master dataset
2009/10 2010/11 20112011
A large-scale, robust data collection process
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The pilot countries
14 countries drawn from 4 continents: Africa, Asia, Europe, South America
Includes developed and emerging economies including middle (lower and upper), and high income economies
Armenia, Albania, BVI, Czech Republic, Estonia, Germany, Hungary, Ireland, Malaysia, Norway, Peru, Poland, South Africa, UK
Ensuring comparable data
• Careful translation to retain the meaning of questions
• Target achieved sample of 1000+ individuals aged 18+
• Weighted data to reflect gender/ age distribution
• Personal interviews (some online: Norway)
Data collected by professional survey organisations in each country using a robust method to maximise comparability
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Analysis of financial literacy scores
Knowledge Maximum of 8
points (High score 6+)
Behaviour Maximum of 9
points (High score 6+)
Attitudes Maximum of 5
pointsHigh score is >3
2 combined measures
1) Overall score Maximum 22
2) Number of high scores
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Financial knowledge
At least 30% of respondents in each of the 14 countries scored less than 6 in the knowledge test (67% in RSA)
• Basic maths is not a problem: most respondents can do a simple division (79% RSA)
• However, there are basic levels of knowledge with serious weaknesses in every country
• Understanding the benefit of diversification and the impact of compound interest are the key difficulties (e.g. In RSA just 21% worked out interest after 1 year and then showed understanding of the benefit of compounding over 5 years)
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Financial behaviours
We looked for 9 positive behaviours. At least 30% of respondents in each country exhibit fewer than 6 of them. (in RSA 57% exhibited fewer than 6).
• Shopping around for financial products is uncommon (UK most likely at just 16%)
• Setting long term goals and striving to achieve them is also quite uncommon in some countries (e.g. Albania 30%)
• The proportion actively saving ranges from below 30% in Hungary to 97% in Malaysia (RSA 53%)
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Attitudes
• Combining results from 3 questions shows that 54% of respondents in RSA have attitudes that tend towards the longer term compared with just 11% in Armenia
• Very few people in Armenia (8%) and Poland (19%) find saving more satisfying than spending (RSA 48%)
• 60% of South Africans disagreed that they tend to live for today and let tomorrow take care of itself
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Relationship between behaviour and knowledge
0 1 2 3 4 5 6 7 82.0
3.0
4.0
5.0
6.0
7.0
Malaysia
Norway
Peru
Poland
South Africa
United Kingdom
Financial knowledge score
Avera
gel
beh
avio
ur
sco
re
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Relationship between behaviour and attitude
1 2 3 4 52.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
Malaysia
Norway
Peru
Poland
South Africa
United Kingdom
Financial behaviour score
Financial attitude score
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Variations by socio-demographics
• Women typically have lower levels of knowledge. In some countries (but not all) they have lower behaviour scores. In most countries women have more positive attitudes towards the long term
• Higher income and higher education are associated with higher overall scores, as is middle age
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Conclusions of pilot
• The OECD/INFE have created a survey instrument that is highly flexible and applicable across a wide range of countries
• The simple, replicable measures of financial literacy allow analysis within and across countries and can be applied whenever the survey is used
• Country level data allows identification of gaps and needs; international data can identify good practices and international priorities (e.g. gender differences)
• The results are very interesting – some worrying findings, some findings that need further investigation, some interesting variations
Key outputs
Framework for the Development of Financial Literacy Baseline Surveys: A First International Comparative Analysis, OECD Working Papers on Finance, Insurance and Private Pensions, No. 1, OECD Publishing.
Measuring Financial Literacy: Results of the OECD / International Network on Financial Education (INFE) Pilot Study OECD Working Papers on Finance, Insurance and Private Pensions, No. 15, OECD Publishing.
Questionnaire and Guidance Notes A questionnaire that includes guidance on how to undertake the survey and how to code the data for analysis. The whole of the questionnaire should be used to enable comparisons. It can be integrated into other surveys or used alone.
A set of supplementary questions A collection of additional questions that may be of relevance to financial education policy in particular countries. Any number of questions from this set can be used.
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Future plans
Further data collection• Many countries are using/have used the questions:
e.g. Jamaica, Korea, Iceland, Thailand, Turkey, South Africa again; or parts of it: Japan, New Zealand (knowledge)
• We will encourage a repeat measure with pilot countries
Additional analysis and reporting• The OECD/INFE will continue to use the pilot data
to inform the work of the subgroups and related research; and publish the results
Thank you!
Comments and questions are welcomeadele.atkinson@oecd.org
Please also let us know if you have used any of our questions, or intend to do so.
The questionnaire and guidance plus supplementary questions are available on our
website.www.financial-education.org
See also http://www.finlitedu.org/ for outputs from the Russian Trust Fund
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