1. OECD/INFE tools for cross- country surveys of financial literacy
Adele Atkinson, PhD
Policy Analyst
With the support of the Russian/World Bank/OECD Trust Fund

2. Outline Questionnaire development the development process
questionnaire content
Data collection
Final list of pilot countries
Data analysis and results
Some highlights: for more see the paper!
Conclusions, outputs and future plans

3. Questionnaire development process
Survey of INFE members: identify questions, survey approaches, analysis methods
Develop, discuss, refine and pilot a questionnaire
Analyse the pilot data, collect feedback from pilot countries
Finalise the questionnaire and make available for widespread use
Review of available national surveys to identify typical content, suitable questions & appropriate method for data collection and analysis
Consultation with experts and country representatives to choose the most important questions and the best combination of questions
Creation and fine-tuning of questionnaire
Invitation to INFE members to pilot: accepted by 14
Creation of a master dataset and preliminary analysis in order to develop scoring
Detailed analysis and reporting; finalising
2008/ / /12

4. Questionnaire content
Behaviour 9 Q
Keeping track of money
Making ends meet
Choosing and using products
Short and long term planning
Knowledge 8 Q
Simple and compound interest
Inflation- time value of money
Risk and return
Risk diversification
Attitudes 4 Q
Propensity to save vs spend
Time preference (present vs future)
Risk preference (explanatory variable)
Financial inclusion
Awareness of products
Holding and using products
Savings habits
Socio-demographic information
Age
Gender
Education
Work
Income
Attitude example
I find it more satisfying to spend money than to save it for the long term
Money is there to be spent
I tend to live for today and let tomorrow take care of itself
I am prepared to risk some of my own money when saving or making and investment
“A combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial wellbeing”

5. Data collection A large-scale, robust data collection process
Invite INFE members to pilot the questionnaire
Countries translate, test and use questionnaire in large scale pilot
OECD collect data from pilot countries and create a master dataset
Review of available national surveys to identify typical content, suitable questions & appropriate method for data collection and analysis
Consultation with experts and country representatives to choose the most important questions and the best combination of questions
Creation and fine-tuning of questionnaire
Invitation to INFE members to pilot: accepted by 14
Creation of a master dataset and preliminary analysis in order to develop scoring
Detailed analysis and reporting; finalising
2009/ /

6. The pilot countries
14 countries drawn from 4 continents: Africa, Asia, Europe, South America Includes 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

7. Ensuring comparable data
Careful translation to retain the meaning of questions
Target achieved sample of individuals aged 18+
Weighted data to reflect gender/ age distribution
Personal interviews (some online: Norway)
Data collected by professional survey organisations in each country using a robust method to maximise comparability

8. Analysis of financial literacy scores
Knowledge Maximum of 8 points
(High score 6+)
Behaviour Maximum of 9 points
Attitudes
Maximum of 5 points
High score is >3
2 combined measures
1) Overall score Maximum 22
2) Number of high scores
This is a wide-ranging questionnaire, designed to capture all of the main aspects of financial literacy
Knowledge relevant to financial decisions
Behaviour such as budgeting, saving and choosing financial products
Attitudes to money and saving
Socio-demographic information (age, gender, education, employment etc)
Most questions are identical across countries but some have context flexibility e.g. product types
The questionnaire includes several indicators of financial inclusion (results not presented here)

9. Financial knowledge
At least 30% of respondents in each of the 14 countries scored less than 6 in the knowledge test (67% in RSA)
Basic maths is not a problem: most respondents can do a simple division (79% RSA)
However, there are basic levels of knowledge with serious weaknesses in every country
Understanding the benefit of diversification and the impact of compound interest are the key difficulties (e.g. In RSA just 21% worked out interest after 1 year and then showed understanding of the benefit of compounding over 5 years)

10. Financial behaviours
We looked for 9 positive behaviours. At least 30% of respondents in each country exhibit fewer than 6 of them. (in RSA 57% exhibited fewer than 6).
Shopping around for financial products is uncommon (UK most likely at just 16%)
Setting long term goals and striving to achieve them is also quite uncommon in some countries (e.g. Albania 30%)
The proportion actively saving ranges from below 30% in Hungary to 97% in Malaysia (RSA 53%)

11. Attitudes
Combining results from 3 questions shows that 54% of respondents in RSA have attitudes that tend towards the longer term compared with just 11% in Armenia
Very few people in Armenia (8%) and Poland (19%) find saving more satisfying than spending (RSA 48%)
60% of South Africans disagreed that they tend to live for today and let tomorrow take care of itself
(Armenian results driven by people finding spending satisfying, and believing money is to be spent)

12. Relationship between behaviour and knowledge

13. Relationship between behaviour and attitude
Financial attitude score

14. Variations by socio-demographics
Women typically have lower levels of knowledge. In some countries (but not all) they have lower behaviour scores. In most countries women have more positive attitudes towards the long term
Higher income and higher education are associated with higher overall scores, as is middle age

15. Conclusions of pilot
The OECD/INFE have created a survey instrument that is highly flexible and applicable across a wide range of countries
The simple, replicable measures of financial literacy allow analysis within and across countries and can be applied whenever the survey is used
Country level data allows identification of gaps and needs; international data can identify good practices and international priorities (e.g. gender differences)
The results are very interesting – some worrying findings, some findings that need further investigation, some interesting variations

16. Key outputs
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.

17. Future plans Further data collection
Many countries are using/have used the questions: e.g. Jamaica, Korea, Iceland, Thailand, Turkey, South Africa again; or parts of it: Japan, New Zealand (knowledge)
We will encourage a repeat measure with pilot countries
Additional analysis and reporting
The OECD/INFE will continue to use the pilot data to inform the work of the subgroups and related research; and publish the results

18. Thank you!
Comments and questions are welcome Please also let us know if you have used any of our questions, or intend to do so. The questionnaire and guidance plus supplementary questions are available on our website. See also for outputs from the Russian Trust Fund