Financial Literacy of Korean High School Students

초록

Understanding the factors that determine financial literacy and their effects can help policymakers and researchers design and implement effective interventions for youth. To this end, this study examines what factors influence the level of financial literacy possessed by Korean high school students. This study further investigates the effects of socioeconomic status, economic attitude and financial attitude on financial literacy and financial behavior using structural equation models, in which endogeneity among latent variables are incorporated. The results of structural models share common and different findings with those of descriptive statistics and simple regression models. First, student’s intention to select economics is the most influential factor of both economic attitude and financial attitude, with GPA the second influential one. Second, economic attitude is more influential than financial attitude in determining financial literacy. Third, the effect of financial attitude on financial literacy changes dramatically depending on the assumptions. The descriptive statistics show that financial attitude has positive effects on financial literacy, while its effects become insignificant in the simple regression model and the benchmark model. However, if we incorporate the enodogeneity of financial attitude explicitly among latent variables, the effects become negative and significant. Finally, financial literacy has positive effects on financial behavior in all models. These findings imply that economic or financial education plays an important role in changing students’ financial behavior such as saving money for the future.