Faculty of Economics and Business Administration Publications Database

A Situational Judgement Approach for Measuring Young Adults' Financial Literacy

Aprea, Carmela
Number: 3; 4
Pages: 272 - 292
Year: 2018
Keywords: Situational Judgement Test, Financial Literacy, Assessment

Financial literacy is of particular importance due to recent developments, e.g. the past economic and financial crisis as well as the recent debt crisis of many European countries. On an individual level, private over-indebtedness stresses the importance of the topic. Looking at the group of adolescents and young adults, almost 15% of them are indebted. As the main reason for over-indebtedness in adults under 25 years, uneconomic budget management could be identified.

Apart from that, there are political, social and economic changes that demand better financial literacy. For instance, there is an increasing need for private insurances for life crises and for a private pension scheme due to the demographical change and the continuing withdrawal of many states from social security systems. Such far-reaching changes cannot be met by informal knowledge transfer in every-day life and socialization in the family any more. The focus shifts to formal education, e.g. at schools. However, to be able to successfully implement financial education in schools, qualitatively good data are necessary to decide about the status quo of financial literacy of young adults.