OECD/INFE toolkit to measure financial literacy and inclusion

Adele Atkinson, PhDOECD

With the support of the Russian/World Bank/OECD Trust Fund

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Outline and overview of toolkit

Outline• Toolkit development• Outcomes• Future plans

Overview• Set of good practice questions• Supplementary question set• Guidance on undertaking a

survey

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Questionnaire development process

Survey of INFE

members: identify

questions, survey

approaches, analysis methods

Develop, discuss and

refine a set of core questions

Undertake a large-

scale exercise

to measure financial literacy

Finalise the questionnaire and make available for widespread

use

2008/9 2010 2010/112011/12

OECD/INFE definition: “A combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial wellbeing”

Existing surveys were scrutinised to identify good-practices and common themes & approaches

A range of national surveys on related topics were examined from around the world- including surveys from Australia, Austria, Canada, Iceland, Ireland, Indonesia, Italy, Malaysia, Netherlands, Singapore , the UK and USA.

A questionnaire has been developed based on existing approaches and good-practice questions

Behaviour

Keeping track of money

Making ends meet

Choosing and using products

Short and long term planning

Knowledge

Simple and compound

interest

Inflation- time value of money

Risk and return

Risk diversification

Attitudes

Propensity to save vs

spend

Time preference (present vs

future)

Risk preference

(explanatory variable)

Financial inclusion

Awareness of products

Holding and using

products

Product choice

Socio-demographic information

Age

Gender

Education

Work

Income5

Additional questions

Why aren’t these in the main questionnaire?

• The core questionnaire is purposely short and focused

• The core questionnaire uses questions that can differentiate between levels of financial literacy

• Some questions are not applicable across all sectors of the population, or all countries

What do they cover?

• A wide range of topics e.g.

• knowledge related to particular products

• Certain behaviours, such as taking advice or making complaints (consumer protection related issues)

• Use and impact of credit• Understanding risk

A set of supplementary questions has also been developed to enable countries to undertake further exploratory study to

inform their financial education initiatives or National Strategies.

A common method of data collection

• Core questions to be used as a set, or placed before other questions when combined

• Careful translation to retain the meaning of questions

• Target achieved sample of 1000+ individuals aged 18+ (aiming for at least a 60% response rate)

• Weighted data to reflect gender/ age distribution• Personal interviews so that respondent’s literacy

levels are irrelevant• Additional guidance available in toolkit

Data to be collected by professional survey organisations in each country using a robust method to maximise comparability

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International measurement exercise

• 14 countries drawn from 4 continents agreed to use the core questionnaire developed by the OECD/INFE and submit the data for analysis;

• They included 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

Since the initial exercise a wide range of other countries have used the questionnaire, and Estonia and South Africa have repeated the measurement to track changes.

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Outcomes

• The measurement toolkit meets a need for simple instruments to collect comparable financial literacy data

• The survey instrument is highly flexible and applicable across a wide range of countries

• The core questionnaire is also applicable in a wide range of circumstances, across different socio-economic groups

• The questions are flexible enough to be used alone, or combined with the supplementary questions or other surveys

• The data can be used to create replicable measures of financial literacy that allow analysis within and across countries

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Future plans

Additional analysis and reporting• The OECD/INFE will continue to use the first dataset to inform

the work of the network and related research.

Further data collection and sharing of toolkit• Repeat the measure; both with original 14 countries and

others: this is already happening!• Collect translated questionnaires to share with other

interested countries• Encourage all countries to incorporate the core questions in

existing measurement exercises, and if possible, share the data with the OECD

Thank you

Questions, comments, further information:

adele.atkinson@oecd.org

OECD/INFE www.financial-education.org

Russian Trust Fund www.finlitedu.org