Financial literacy in perspective – evidence from Estonian and Finnish students
Mändmaa, Sirli (2022-03-25)
Väitöskirja
25.03.2022
Lappeenranta-Lahti University of Technology LUT
Acta Universitatis Lappeenrantaensis
School of Engineering Science
School of Engineering Science, Tuotantotalous
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Julkaisun pysyvä osoite on
https://urn.fi/URN:ISBN:978-952-335-797-6
https://urn.fi/URN:ISBN:978-952-335-797-6
Tiivistelmä
Rapid evolution of the financial sector, and the shift of responsibility for long-term financial well-being from the states to the individuals, caused mainly by demographic changes, requires a deeper understanding and evidence-based solutions to improve financial literacy.
Findings from studies clearly suggest a need for financial education, where the needs of different target populations are taken into account while maintaining a delicate balance between increasing self-efficacy and creating potentially harmful overconfidence.
The main goal of this research was to find out gaps and needs in university students’ financial literacy to develop the personal financial education.
The dissertation focused on the following research questions:
What is the level of financial literacy of students in Estonian and Finnish universities of technology?
What factors affect students' financial literacy levels?
Do students use financial services and plan their financial affairs, and is there a relationship between students' choices and financial literacy?
How to explain the differences in the financial knowledge and behaviour and factors influencing them of Finnish and Estonian students?
How do students evaluate the acquired financial knowledge and knowledge providers?
What changes should be made to promote financial education?
The thesis consists of five articles where the first describes the study that was conducted as pilot study to find out if there is the lack of financial knowledge among students. The first three articles used the data collected from Estonian universities students, the fourth used the data collected from Finnish students, and the fifth article addressed the data from the studies of both countries. In the pilot study, 522 Estonian students from different higher educational institutions were participated and results showed the Low level of financial literacy (overall mean of correct answers about 59%). In the continued study, the Explanatory Sequential Mixed Methods design was used, where a quantitative part of the study was conducted among 1110 participants, followed by a qualitative part with a sample sized of 22 students. The data were collected in a quantitative part through a questionnaire survey and in a qualitative part in three focus groups.
Using the scale Low-Medium-High, the financial knowledge of students was assessed at the Medium level in both countries. However, Finnish results were slightly higher (FIN 74% and EST 68%) and there occurred some gender differences. In the results of the regression analysis of Estonian students’ responses, the statistically significant factors were: Academic Discipline, Level of Education, Age and Nationality, which were not significant in the Finnish students’ study, while Previous experience in using financial services was a significant factor in both. The findings showed that a significant factor in the Finnish study was income, which had no significant impact on Estonian students’ financial literacy. The results of the study revealed a marked gap in financial literacy levels between self-esteem and tested results, referring to students' overconfidence. The collected data were analysed using the software Statistical Package for the Social Sciences (SPSS).
The directed approach of content analysis was chosen to analyse the collected qualitative data. By the opinions, in the transmission of financial education, the most important factor was the connection with real life - the use of interesting examples, tasks and practical advice. That, in turn, attracts attention to the need for knowledge and skills of teaching staff and to improvement of the level.
The objects of this study were students from technology universities, who highly appreciated the knowledge gained from the university. Their opinions expressed included suggestions to offer a preparatory financial course to the first-year students, which would contain the knowledge of saving, borrowing, budgeting, investing, as well about financial risks, and in the future, further more in-depth courses (what is happening in the financial markets; the current economic situation in different countries; evaluation of companies' value and economic activities, etc.).
The dissertation supports the need for additional studies and tools for enhancing the financial education programs. The present study highlights the gender differences as well the impact of mathematics (expressed in the choice of academic discipline) on financial literacy. Given the role of women in today's world, it is vital to continue the research and to use behavioural insights and tips from behavioural economics and economic psychology research in the future studies.
The results of the thesis are important for the university, as they present a proven need to improve teaching in the field of Personal Financial Education.
Findings from studies clearly suggest a need for financial education, where the needs of different target populations are taken into account while maintaining a delicate balance between increasing self-efficacy and creating potentially harmful overconfidence.
The main goal of this research was to find out gaps and needs in university students’ financial literacy to develop the personal financial education.
The dissertation focused on the following research questions:
What is the level of financial literacy of students in Estonian and Finnish universities of technology?
What factors affect students' financial literacy levels?
Do students use financial services and plan their financial affairs, and is there a relationship between students' choices and financial literacy?
How to explain the differences in the financial knowledge and behaviour and factors influencing them of Finnish and Estonian students?
How do students evaluate the acquired financial knowledge and knowledge providers?
What changes should be made to promote financial education?
The thesis consists of five articles where the first describes the study that was conducted as pilot study to find out if there is the lack of financial knowledge among students. The first three articles used the data collected from Estonian universities students, the fourth used the data collected from Finnish students, and the fifth article addressed the data from the studies of both countries. In the pilot study, 522 Estonian students from different higher educational institutions were participated and results showed the Low level of financial literacy (overall mean of correct answers about 59%). In the continued study, the Explanatory Sequential Mixed Methods design was used, where a quantitative part of the study was conducted among 1110 participants, followed by a qualitative part with a sample sized of 22 students. The data were collected in a quantitative part through a questionnaire survey and in a qualitative part in three focus groups.
Using the scale Low-Medium-High, the financial knowledge of students was assessed at the Medium level in both countries. However, Finnish results were slightly higher (FIN 74% and EST 68%) and there occurred some gender differences. In the results of the regression analysis of Estonian students’ responses, the statistically significant factors were: Academic Discipline, Level of Education, Age and Nationality, which were not significant in the Finnish students’ study, while Previous experience in using financial services was a significant factor in both. The findings showed that a significant factor in the Finnish study was income, which had no significant impact on Estonian students’ financial literacy. The results of the study revealed a marked gap in financial literacy levels between self-esteem and tested results, referring to students' overconfidence. The collected data were analysed using the software Statistical Package for the Social Sciences (SPSS).
The directed approach of content analysis was chosen to analyse the collected qualitative data. By the opinions, in the transmission of financial education, the most important factor was the connection with real life - the use of interesting examples, tasks and practical advice. That, in turn, attracts attention to the need for knowledge and skills of teaching staff and to improvement of the level.
The objects of this study were students from technology universities, who highly appreciated the knowledge gained from the university. Their opinions expressed included suggestions to offer a preparatory financial course to the first-year students, which would contain the knowledge of saving, borrowing, budgeting, investing, as well about financial risks, and in the future, further more in-depth courses (what is happening in the financial markets; the current economic situation in different countries; evaluation of companies' value and economic activities, etc.).
The dissertation supports the need for additional studies and tools for enhancing the financial education programs. The present study highlights the gender differences as well the impact of mathematics (expressed in the choice of academic discipline) on financial literacy. Given the role of women in today's world, it is vital to continue the research and to use behavioural insights and tips from behavioural economics and economic psychology research in the future studies.
The results of the thesis are important for the university, as they present a proven need to improve teaching in the field of Personal Financial Education.
Kokoelmat
- Väitöskirjat [1029]