STOCK MARKET WATCH -- Wednesday, 9 July 2014

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40. Why Do Chinese Students Know More About Money Than Americans?

http://www.theatlantic.com/education/archive/2014/07/why-do-chinese-students-know-more-about-money-than-americans/374147/

In a new report comparing financial literacy skills among 15-year-olds in 18 countries, U.S. students scored in the middle of the pack on basic questions about savings, bank accounts and credit/debit cards, and weighing risks and rewards in deciding how to spend their dollars.

Why does this matter? With money management the buzz phrase of post-recession America, there’s an increasing push from both the public and private sector to make sure the nation’s young people are taught the fiscal smarts to make wise decisions for themselves on everything from living within a budget to savings accounts to college loans.

This is the first time the Organization for Economic Cooperation and Development (OECD) has tested financial literacy as part of its PISA assessment, which is one of the few international benchmarks for comparing academic achievement among countries. At the lowest level of difficulty, students had to be able to identify the purpose of an invoice. In one of the more complex questions, students were asked to explain how a consumer might benefit from paying off a high-interest loan with money from another lender. (You can find some of the questions and answers here.)

China’s Shanghai province topped the OECD list with a mean score of 602—more than 100 points above the 500 mean score for the OECD countries. The U.S. students’ mean score was 492, which is considered statistically on par with the average.