Faculty of Economics and Business Administration Publications Database

Assessing Financial Literacy as a Basis for Designing and Evaluation Interventions in Vocational and Adult Education and Training

Aprea, Carmela
Fürstenau, Bärbel

Financial literacy—the ability to deal with money and financial matters reasonably—is becoming more essential in everyday life. Its increasing importance is mainly driven by socioeconomic trends, such as structural changes in the financial and labour markets and the decline of the welfare state, and by demographic changes. These trends impose challenges on citizens that cannot be tackled by family socialisation and everyday experience alone. In contrast, they demand education or training intervention, such as instruction, counselling/coaching and information provision via the media. In particular, this request is pressing for the following target groups:

  • Those starting their professional lives, particularly apprentices in vocational education and training and university students.
  • Those in charge of managing and planning their own and their families’ financial affairs in different situations of their adult lives (e.g. purchasing real estate, retirement planning), including those who are confronted with specific financial risks (e.g. overcoming precarious living conditions, such as unemployment or divorce).

To design effective interventions for those groups, the first step is assessing their current state of financial literacy. Moreover, a sound assessment approach is an indispensable prerequisite for evaluating the success and impact of those interventions.

Thus, this thematic issue is focused on different approaches of assessing financial literacy. To date, many financial literacy assessments for the target groups of interest mainly include multiple-choice items, and they often only measure isolated bits of knowledge. However, as known from research on inert knowledge, this type of assessment does not necessarily represent the ability to use this knowledge in everyday problem solving and decision-making. In addition, non-cognitive facets of financial literacy, such as delay of gratification and risk preference, are not always considered, or they are only measured by self-reporting, which poses the risk of social desirability biases. 

To measure financial literacy reliably and validly and to capture the educational needs as accurately and comprehensively as possible, contributions that address financial literacy assessment from various perspectives are particularly welcome. For example, this could mean considering different facets of the construct (e.g. cognitive, non-cognitive, individual and systemic aspects) or using different assessment methods, including questionnaires, situational judgement tests or serious games

Keywords: measurement of financial literacy, assessment, training interventions
Year: 2019
Link External Source: Online Version
Publisher: Springer
Volume: 11
Series: Empirical Research in Vocational Education and Training (ERVET)