Measuring levels of financial capability and the effectiveness of financial education

A major three-year program of research into financial capability has just completed. Between 2010 and 2013, a Trust Fund supported by the Russian Federation provided substantial resources to the World Bank and the Organisation for Economic Co-operation and Development (OECD) to undertake two distinct but coordinated programs of work.  This concluded at the end of June 2013 and the results have just been published.

The World Bank focused its efforts on developing diagnostic and measurement tools and undertaking research on the results achieved by a wide range of programs designed to improve financial capability.  This work is ground-breaking in its content and involved:

In addition there is an overview report (PDF) that not only brings together these three strands of work but also sets it in a very helpful conceptual context, which draws a distinction between traditional approaches to measuring financial literacy (which tend to be normative and cognitive)  and the more empirical positive/agnostic approach to measuring financial capability that was adopted for the World Bank program of work.

Professor Elaine Kempson was the lead consultant on the World Bank program, and she is first named author on the two publications relating to the surveys. She was also a contributor to the tool kit and overview report. PFRC’s Director, Sharon Collard, was a consultant on the survey work.

In parallel, the OECD, in conjunction with the International Network for Financial Education (INFE), focused its efforts on the review and stocktaking of policy development and national strategies to facilitate the sharing of experience and formulate principles, guidelines and best practices. It also developed a short survey instrument to measure and monitor the knowledge, attitudes, skills, and behaviour of individuals.

Professor Elaine Kempson was also consultant to the OECD developmental work on the survey, and author of a report informing the work of the OECD in this area.


Final outputs of the Trust Fund [External link to Financial Literacy and Education website, which contains links to all of the outputs referred to above.]

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