German students outperform U.S. peers on test of financial literacy | Nebraska Today

Welcome to Pocket Science: A look at recent research by Husker scientists and engineers. For those who want to quickly learn the “What”, “So what” and “Now what” of Husker research.


Between earning, renting, buying, insurance, saving and investing, most adults need a foundation of financial literacy on which to build a life. The digitalisation of fiat currencies, the pressure of retirement planning and the rise of cryptocurrencies only add to the importance of choosing the right path through the modern financial landscape.


William Walstad of Nebraska worked with Andreas Kraitzek and Manuel Förster of the Technical University of Munich to compare American and German approaches to educating young people about personal finance – and to examine the results of that training.

One of the commonalities between the two countries, the team concluded, is their lack of a federal, centralized approach to financial literacy education. Both countries generally delegate decisions on financial curriculum – what is in it and how it is delivered, if it is delivered at all – to individual states. Although the lack of regulation has yielded numerous approaches to teaching financial literacy within and between the two countries, the researchers found reasonable overlap in the actual content taught to teens and young adults.

But big differences were realized when the team analyzed data from the Financial Literacy Multiple Choice Test, specifically the responses of 1,218 U.S. high school students and 1,108 first-year college students in Germany. For one, German students seem to have distinguished between three facets of personal finance – banking, everyday money management, and insurance – to a greater extent than USA students, who were more likely to combine the areas cognitively. They also fared better than they did USA peers in all three areas, especially in terms of money management and insurance. The German students answered an average of 9% more questions correctly throughout the test.

U.S. students have shown a greater understanding of the factors that influence credit scores, which may reflect the larger fluctuating credit scores in general across interest rates in the United States, the researchers said.

Now what?

Although slight differences in age and life experience may be responsible for some of the differences in knowledge, those differences probably also stem from cultural distinctions that future studies would do well to investigate, the team said. A closer examination of the test data may also reveal country-specific misconceptions related to personal finances.

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