WASHINGTON – The Wall Street meltdown of 2008 and the ensuing recession did little to help make high school seniors financially savvy and less than half of them have a solid understanding of economics, according to an Education Department report released Tuesday.
In real terms, that might mean that students might have difficulty understanding the impact of a poor credit rating, the relationship between consumer spending and higher unemployment or how inflation can eat away at pay raises.
Students’ scores of economic literacy changed little between 2006 and 2012, suggesting that the national discussion about the millions of jobs that were lost and homes that were foreclosed didn’t translate to higher academic achievement. During that period, several states added an economics course to high school offerings and some started requiring it to earn a diploma.
The findings show that more than half of students leave high school without an economic knowledge that federal officials consider proficient. In 2012, 39 percent of students had a basic understanding of economics while 18 were considered below basic.
“This is exactly what I would have expected,” said Annamaria Lusardi, a distinguished scholar at George Washington University who on Wednesday testified to a Senate subcommittee about students’ economic skills.
“Financial literacy is like every topic; they don’t learn by osmosis. Just because you read the Wall Street Journal, you’re not going to learn about interest compounding,” Lusardi said, noting headlines were no substitute for instruction.
About 10,900 high school seniors at 480 public and private schools took the economics test as part of the 2012 National Assessment of Educational Progress, more commonly called “the nation’s report card.”
But among Hispanic students, performance rose, narrowing the gap between their scores and those of their white classmates.