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May 8, 2011

Failing Our Children: Wisconsin's Deficit in Teaching Personal Finance and Economics

Scott Niederjohn:

Given the importance of economic and financial education, one might expect to find these subjects emphasized in Wisconsin's K-12 schools. Other states are ahead of Wisconsin. Twenty-one states now require high school students to take an economics course; thirteen states require students to take a personal finance course. In Wisconsin, neither is required, so few Wisconsin high school students take a course in economics or personal finance, and few teachers are qualified to teach one.

This widespread disregard has real consequences. The financial crisis from which our nation is currently recovering illustrates some of these, having arisen in part from ill-considered decisions by financially illiterate consumers of credit. For American workers, moreover, the trend away from defined-benefit pensions toward defined-contribution pensions places increasing investment responsibilities in the hands of individuals.

Evidence suggests that improvement will be a challenge. Surveys and assessments of economic and financial education generally yield dismal results. Americans are neither confident in their skills in these areas nor do they perform well on tests of knowledge. Their lack of economic and financial savvy plays out variously -- for example, in the lives of large numbers of Americans who find themselves "unbanked" and reliant on dubious sources of financial services such as payday-loan stores and check-cashing outlets. College students, meanwhile, rack up record levels of credit-card and student-loan debt.

Posted by Jim Zellmer at May 8, 2011 4:28 AM
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