Publication year
2019
Citation Title
The influence of informal learning opportunities on adolescents’ financial literacy.
Journal Name
Empirical Research in Vocational Education and Training
Journal Volume
11
Issue Number
11
Page Numbers
1-17
DOI
10.1186/s40461-019-0086-y
Summary
Ensuring that young people are financially literate is increasingly important as the current economic climate requires them to engage in complex financial decision making. The current study explored the role of informal learning opportunities in the acquisition of financial literacy among youth. Overall, findings revealed several informal learning opportunities (e.g., parents, siblings, and personal experience) have significant impacts on youth’s financial literacy.
Key Findings
The more youth learned from parents, the better their test performances were on questions regarding money and payments, loans, and insurance.
The more youth acquired knowledge from siblings on money and payments and saving lead to lower test scores on money and payments, loans, and insurance questions.
Youth with more books (used as an indicator for socioeconomic status) and without an immigrant background were more likely to obtain higher test scores on the dimensions of financial literacy.
Implications for Military Professionals
Help develop modules to inform parents of best approaches to increasing youth’s financial literacy
Collaborate with community programs and schools to create similar financial literacy programs for youth and their families across multiple settings
Implications for Program Leaders
Offer workshops for families to help them to improve their own financial literacy
Develop fun and educational activities related to finances for youth to increase interest and learning in financial topics
Implications for Policy Makers
Promote financial literacy curricula that takes into account personal and socioeconomic background factors in extracurricular activities and schools
Recommend training for professionals who work with youth on the significance of informal learning opportunities in the development of youth’s financial literacy
Methods
Data were collected from participants in Lower Saxony, Germany.
Participants completed a paper-based questionnaire that contained items for money and payments, savings, loans, insurance, and monetary policy.
Participants indicated where they learned about money and payments, savings, loans, insurance, and monetary policy, such as from parents, siblings, friends etc.
Participants
Participants were 530 high school students.
Participants were relatively equally divided in terms of gender (50.9% female and 48.9% male).
While 66.6% of participants did not have a migrant background, 32.1% of participants had parents who were born outside of Germany.
No information was provided on the racial/ethnic background or the age of the participants.
Limitations
The findings on learning opportunities are limited as the measurement was not comprehensive; it cannot provide information on why participants chose one learning opportunity over another as well as the extent to which the learning opportunities differ from each other.
The long-term effects of informal learning opportunities on financial literacy cannot be determined because the data were collected at one time point.
The data in the study only represented a specific education group of youth in Germany, with limited generalizability to youth outside of this sample.
Avenues for Future Research
Explore the relationship between youth’s financial literacy scores and their siblings’ ages
Assess the impact of parents’ level of financial literacy on youth’s financial literacy test performance
Examine youth’s actual use and the quality of the different financial literacy learning opportunities
Focus
Civilian
Target Population
Population Focus
Abstract
In today’s service society, adolescents come into contact with money and financial products and services earlier and earlier. Despite the importance of the topic in the adolescents’ lives, there is insufficient evidence on the learning opportunities adolescents use outside of school and education to obtain information on financial issues and how these affect their financial competence. This paper investigates how different informal learning opportunities influence grade 10-students’ financial literacy. Data are available for N=530 students in general education. The analyses are based on a structural equation model in which financial literacy is represented as a latent variable with the sub-dimensions of money/payments, savings, loans, insurance, and monetary policy. Young people use different learning opportunities depending on the sub-dimension. Overall, parent-student discussions on finance are the most important informal source of learning. Discussions with siblings as well as consulting sessions with banks and media learning opportunities are also significantly related to financial literacy. Furthermore, personal characteristics, such as socio-economic background and economic interest, are also associated with financial literacy. The findings provide important implications for the promotion of financial literacy in different formal and informal learning situations. The results can be used, among other things, as a basis for developing targeted strategies to promote financial literacy in both the extracurricular sector and the school context.
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