International initiatives on financial education: The OECD International Network on Financial Education Adele Atkinson, PhD Policy Analyst Financial Education and Consumer Protection Unit
Outline • The OECD’s role in guiding financial education policy 1 • The OECD/INFE themes and outputs 2 • Key messages relating to financial 3 education in schools
Recognising the importance of financial education Started in 2002 Purpose: to respond to the objective of policy makers and other stakeholders to improve levels of financial literacy Serviced by 2 OECD committees - The Committee on Financial Markets - The Insurance and Private Pensions Committee International Network on Financial Education (INFE) created in 2008 3 strands of work: 1. Data collection, research and international analytical framework 2. Internationally recognised standard setting objectives 3. International dissemination and co-operation
Undertaking research from the beginning 2008 – First analysis on: 2005 – OECD issued the first international - Risk awareness and publication on financial insurance education education - Private Pensions and saving for retirement 2008 onwards – reports on specific issues: - Credit - National pension awareness - Annuities and FE - Risk awareness on large-scale risks - FE in schools - Evaluation of FE programmes
Ongoing collaboration • Continued R&D by expert INFE subgroups, including surveys of member countries to identify good practices and policy gaps • Biannual INFE meetings and expert subgroup meetings; plus international and regional conferences: Madrid: May 2012 Cebu, Philippines: September 2012 Cartagena, Colombia: October 2012 See our website for more info www.financial-education.org 5
INFE themes International methodologies on: • Measuring financial literacy of: Studies and research into financial education and: Adults • Credit 15 year olds (PISA) • Evaluation • Saving and investment • Pensions issues • Behavioural economics Dedicated programmes on • Social marketing and financial education and: communication strategies • National strategies • Financial consumer • Financial inclusion protection • Women • Investors 6
Where are we now? • International leadership • G8 and G20 mandates and endorsements: e.g. Seoul 2010; Paris 2011; Los Cabos 2012 • Global clearinghouse (IGFE) sharing resources, data, good practice guidelines • INFE experts from almost 100 countries • Expert subgroups addressing a range of issues and sharing findings at regular meetings • Secure, members-only online discussion portal 7
4 sets of recommendations already endorsed Principles and Good Practices on Financial Education and Awareness (endorsed by OECD Council in 2005) Good Practices for Financial Education Relating to Private Pensions (endorsed by OECD Council in 2008) Good Practices for Enhanced Risk Awareness and Education on Insurance Issues (endorsed by OECD Council in 2008) Good Practices on Financial Education and Awareness Relating to Credit (endorsed by OECD Council in 2009) Recommendation on Guidelines for Financial Education in Schools (forthcoming).
Additional; high-level Principles G20 (2011), High-level Principles on Financial Consumer Protection OECD/INFE (2011), High-level Principles for the Evaluation of Financial Education Programmes OECD/INFE (2012) High-level Principles on National Strategies for Financial Education
Example of key outputs. 1) evaluation Fact-finding stock take of programme evaluation amongst INFE members (2009) (30 countries-50 programmes) Comparative and analytical framework for evaluation of financial education (2010) OECD/INFE high-level principles on evaluation of financial education programmes (2011) OECD/INFE Guides to Evaluation (2011) 10
Example of key outputs. 2) measurement 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. 11
OECD/INFE suggestions for efficient financial education in schools 1) Strategy for financial education Position financial education in schools within a broader National Strategy for Financial Education Identify a public leader to ensure sustainability Identify clear and realistic policy goals: Keep in mind that financial education can complement but not substitute regulation and consumer protection Earmark long-term and sustainable resources Assess the needs and gaps in financial literacy and prioritise accordingly Map existing programmes and identify gaps in provision Design evaluation alongside programmes 12
OECD/INFE suggestions for more efficient financial education in schools Integrating financial education in school It may be necessary to start informally with optional financial education Ideally, the aim is to integrate financial education into the curriculum, across school years (and maybe across subjects) Follow education principles to identify key competencies and set goals Develop detailed but flexible learning frameworks Keep teachers and other stakeholders involved Be careful to manage potential/perceived conflicts of interest
Examples • NZ: Cross curricula ‘social - inquiry’ approach, used to link subjects such as social sciences, maths, English and health. • NI: Statutory for 4-14 year olds. Starts mostly in maths, later branching into home economics and economic awareness. • UK: pfeg quality mark to manage potential conflicts of interest. 14
OECD/INFE suggestions for more efficient financial education in schools Preparing the teachers and materials Fully train the teachers and other providers Remember those already in service as well as trainees Develop teachers confidence in their own financial literacy before providing them with pedagogical training and materials for the classroom (remember that even the trainers may need training – are teacher training colleges prepared to teach financial literacy?) Assess existing materials and tools, and identify gaps: develop criteria for assessing and indicating the quality of materials
OECD/INFE suggestions for more efficient financial education in schools Creating incentives Find ‘champions’ to describe the benefits of financial education in the classroom Develop ways of recognising achievement of pupils, teachers, schools and the community (exams, performance awards, prizes etc) Consider extra-curricular events Exchange good practices with others Monitor and evaluate provision to provide positive feedback and guidance
Financial education limitations Recognise the limits of financial education FE is no panacea and is a long-term process FE has limits : links between financial knowledge and behaviours are not obvious FE is a new policy priority: more robust evaluation on efficiency of various programmes and international measure and data on financial literacy are needed Consumers are not rational : Passive behaviours even if they are properly informed Numerous psychological/behavioural biases Solutions to counter these limits at least on the short term (default mechanisms) should be considered where necessary Appropriate regulation to prevent notably fraud & bankruptcies and offer easy redress and improve the quality of financial information and transparency
Thank you! Comments and questions are welcome adele.atkinson@oecd.org www.financial-education.org 18
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