Israeli Teens Get Failing Grade for Financial Literacy

Out of 18 OECD member countries and economies, Israeli 15-year-olds outscored only Slovakia, Italy and Colombia

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You’re not the only one who can’t make sense out of your bank statement or that letter you just got from the National Insurance Institute, neither can your teenager.

A quarter of Israeli 15-year-olds are not qualified to make basic financial decisions and have a limited understanding of financial terms, according to a study released this week by the Organization for Economic Cooperation and Development. The study was based on the first financial literacy test ever administered by the organization. Israel ranked 15 of 18 OECD member countries and regions; only Slovakia, Italy and Colombia scored lower.

While one-fourth of the Israelis failed the test, performing so poorly as to be wholly unprepared to make basic financial decisions that affect their lives — more than in any other participating country or region — 8.5% earned very high scores. This group reached the top level of five, a rate approaching the OECD average of 9.7% for top scorers.

Some 29,000 15-year-olds in 18 countries and regions took part in the so-called PISA assessment of their ability to make simple economic decisions. They were tested on their knowledge and skills in dealing with everyday financial issues such as understanding a bank statement, the long-term cost of a loan or knowing how insurance works.

One question shows an invoice from Breezy Clothing, made out to a Sarah Johanson. Students were asked, “Why was this invoice sent to Sarah?” and asked to choose from among four answers:

1. Because Sarah needs to pay the money to Breezy Clothing.

2. Because Breezy Clothing needs to pay the money to Sarah.

3. Because Sarah has paid the money to Breezy Clothing.

4. Because Breezy Clothing has paid the money to Sarah.


When it came to gaps in financial literacy between different ethnic and socioeconomic groups, Israel was ranked second. The largest gap – 108 points – was between Arab and Jewish students.

Education Ministry officials said that at around 503 points, the performance of Hebrew-speakers was similar to the OECD average of 500. They noted that 15% of the Jewish students received an especially low grade, compared to 49% of the Arab students.

The ministry said that in regard to socioeconomic gaps, these were wider among Jews — 94 points between students from the least- and most-advantaged families, as opposed to 45 points for their Arab counterparts.

The assessment was part of the 2012 PISA tests in math, language and science. The results of this and other OECD surveys suggest that Israel’s education system is far behind that of other OECD member states.

The OECD recommended narrowing the gaps in financial literacy between students of various socioeconomic backgrounds.

“Without government intervention that focuses on the students from lower-income families the gaps will grow and continue in the next generation,” the OECD said. In 2011 the Education Ministry introduced a program for financial education in schools, but only about 140 schools participate in it.

The Israeli students’ performance in solving problems related to basic life skills were also low, with only 21% of the scores above the minimum level defined as required to function in society.

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