The relationship between migration background and knowledge and understanding of personal finance of young adults in Germany

Economic competence in early secondary school: Evidence from a large-scale assessment in Germany

“…These findings correspond to results from the 2012 and 2015 PISA financial literacy assessment where the (conditional) difference between students with an immigration background and those with parents born in the respective country of assessment amounts to about 0.19 to 0.26 SD units (OECD 2014(OECD , 2017. Similar to Happ and Förster (2018), we investigate the source of this difference in test performance and find that the effect of immigration background increases when operationalized via the primary language spoken at home (instead of the place of birth of one parent). Our results are in line with the observation that differences in competence may be driven by differences in reading comprehension resulting from the fact that the primary language at home is different from the language used at school.…”

“…We investigate in complementary analyses (using a different definition of migration background based on the primary language used at home) that this effect is likely to be driven by differences in language skills resulting from the fact that the primary language at home is different from the language used in school (cf. Cameron et al 2014;Happ and Förster 2018). Additionally, we document positive correlations between self-reported math and reading skills and economic competence.…”

Measuring financial literacy with a Situational Judgement Test: do some groups really perform worse or is it the measuring instrument?

“…Studies that measure financial literacy of (young) adults indicate that a large group of these seem to have a considerable lack of knowledge in finance related topics and considerable difficulties in making proper financial decisions (e.g., Gramatki 2017; Ergün 2017; Happ et al 2018;Rudeloff et al 2019;Strömbäck et al 2017). Although different financial literacy tests are used in these studies and thus partly different test formats besides the classic multiple-choice items (e.g., Gramatki 2017; Happ and Förster 2019;Rudeloff 2019;Strömbäck 2017) or true-false items (Tang et al 2015) are used, results of the studies show rather unanimously that financial literacy appears to differ in terms of various socio-demographic factors and educational background.…”

“…Another factor that differentiates between the performance of test-takers in financial literacy tests is their migration background (e.g., Gramatki 2017; Happ et al 2018;Rudeloff et al 2019;Happ and Förster 2019). This effect is explained by the fact that immigrants often have a poorer economic background and parents who work in lower-skilled jobs or who do not speak the test language at home.…”

“…These studies also show that some groups often perform particularly poorly. This is primarily the case for women as well as for persons with migration background and/or a low level of education (e.g., Bucher-Koenen et al 2017;Happ and Förster 2019). These differences are often attributed to different individual dispositions, such as interest in financial issues (e.g., Brown and Graf 2013;Lührmann et al 2015) or differences in socialisation patterns and learning opportunities (e.g., Rinaldi 2017;Rudeloff 2019).…”