According to a recent report on global student financial literacy from the Organization for Economic Cooperation and Development, American students come in just below average. Students in Shanghai, China produced the highest scores on average.

The OECD report, published July 9th, also argues that the financial literacy of a country — including students being able to make economic decisions and to decipher documents like invoices and bank statements — is a critical factor in the development of national economies.

OECD financial literacy test details

The OECD got the data for the report by testing 30,000 teenagers in 18 countries about various financial concepts. Overall, only about 10% got the highest score, which means they “can solve non-routine financial problems, such as calculating the balance on a bank statement… and can demonstrate an understanding of the wider financial landscape, including the implications of income-tax brackets.” On the other hand, around 15% of 15-year-olds basically flunked the test, meaning they are “unable to make even simple decisions about everyday spending.”

Around 18% of U.S. students tested did not meet even the baseline level of proficiency to be considered financially literate. On the other hand, about 2% of students tested in Shanghai, China, could not meet the baseline, and 43% earned top scores.

Financial Literacy

The average score among the 30,000 students from 19 countries was 500. The average score of a U.S. student was 492.

No direct correlation between math skills and financial literacy

The study showed a strong correlation in the U.S. between high financial literacy and strong performance in math and reading — although, it’s important to note that that is not the case in every country. This highlights the fact that teenagers who are good at math aren’t automatically skilled at applying these skills to solving real-world financial problems.

Financial Literacy performance

Australia and the Czech Republic strongly promote financial literacy and teach it in schools, and the results are clear in the OECD rankings—students in those countries rank much higher on money matters than you would expect from their math and reading scores. Moreover, the opposite relationship holds true in France and Italy.