Joanne Yoong, University of Southern California Center for Economic and Social Research
In a letter to his friend Jean Baptiste LeRoy in 1789, the American Founding Father Benjamin Franklin wrote “In this world, nothing can be said to be certain except death and taxes”. Franklin’s letter far predated the United States’ Social Security Act of 1935, which set up a social insurance programme for American workers, providing them with at least some degree of certainty about income after retirement. But, in today’s environment, to what degree do Americans feel secure about their retirement? How well do they understand their own role and that of Social Security in contributing to retirement security?
Researchers at USC conducted a new study in 2016 to collect data on American’s understanding of retirement preparedness and the perceived role of Social Security. A special-purpose survey was designed and fielded as part of the Understanding America Study (UAS), a panel of approximately 6,000 individuals aged 18 or over representing the entire United States. The survey results highlight a worryingly-low level of retirement–related financial literacy.
Seventy percent of survey respondents are relatively uncertain about their retirement-related financial literacy, rating themselves either “somewhat” or “not too” knowledgeable. More worryingly, both self-assessed and actual knowledge of retirement-related financial principles are lower compared to the 2009 results. This is consistent with findings reported by Annamaria Lusardi from the US National Financial Capability Study, which found that basic financial literacy has been declining in each survey wave since 2009. Just as worryingly, disparities in knowledge by age, income and education remain present across all our measures of knowledge and preparedness, with Hispanics and Blacks at a particular disadvantage relative to non-Hispanic Whites.
The survey also shows that respondents are more pessimistic about Social Security, in comparison to the 2009 study. In particular, most respondents do not feel confident in the future ability of the Social Security system to pay their promised benefits, and a majority expect the Social Security system to fall short of providing enough for a reasonable standard of living.
Results also suggest a clear gap between respondents’ expectations about Social Security, and their actual understanding of how it works, suggesting that many Americans may not be maximising their benefits, or may not even be aware of their full entitlements. While most people are able to identify the general features of the Social Security system, a sizable group do not grasp critical details relevant to the impact of their own benefit claiming choices. About a quarter of future beneficiaries mistakenly believe that benefits need to be claimed at the time of retirement, while one in five are unaware that claiming early can reduce benefits. Just over 10% are not aware of disability entitlements, almost 20% are unaware of survivor benefits for children, and almost 40% do not know that spousal benefits can be claimed even if they do not have children.
Combined with the findings of the OECD/INFE Survey of Adult Financial Literacy Competencies on the correlation between financial knowledge and retirement planning, the UAS results suggest the potential for further negative effects.
Previous research has established a causal relationship between financial literacy and long-term planning. This new study reinforces that becoming and staying informed is a decision in itself that poses its own challenges.
Most UAS respondents feel that it is very important for the Social Security Administration to educate people about how to prepare financially for retirement. When asked to assess different sources of information, UAS respondents were most likely to trust the accuracy of retirement-related information either from Social Security or financial professionals. However, in practice, they most often turn to their social networks or receive information from their employers, rather than proactively seeking information from these trusted sources. A pragmatic and forward-looking financial education policy therefore requires working with diverse groups of both private and public stakeholders, not only to provide the right information but also to prevent the spread of wrong information.
How will policy makers and practitioners know which strategies are most effective at reaching which consumers, and how effective they are at altering behavior or financial outcomes?
Some of the responses to these questions may be found in the 2016 OECD Pensions Outlook. In parallel, recent data collection efforts such as the NCFS and the UAS and, more generally, the OECD/INFE survey that are focused on tracking both financial knowledge and behavior are helping to generate new and relevant findings. The ability to follow individuals over time, and to link financial knowledge to other types of knowledge and behavior is equally essential. Matching survey responses to actual financial transactions data and re-administering modules regularly will allow assessment of behavioral changes as well as the respondents’ financial status over the longer-term as the economic and policy environment evolves.
For now, it is important to support both initiatives that aim to improve retirement preparedness as well as sustained investments in measurement and evaluation to ensure that such initiatives are effective. It may be impossible to provide absolute certainty about financial well-being in old age, but more can certainly be done to ensure that expectations are properly aligned and that Americans are making informed decisions about retirement, including decisions about their own Social Security benefits.
 The UAS panel is Internet-based, which means that respondents answer surveys on a computer, tablet, or smart phone, wherever they are and whenever they wish to participate. While most panel members have their own Internet access, those who do not are provided with Internet access by USC. Surveys are designed by research teams around the world and final datasets are posted on the USC website with sample weights. A number of these surveys, including ours, focus on economic and financial decision-making. These areas are also highlighted in the work carried out by the OECD/INFE.
 See Lusardi and Mitchell, “The Economic Importance of Financial Literacy: Theory and Evidence,” Journal of Economic Literature, March 2014, vol. 52(1), pp. 5-44.
Today we publish the second of a two-part article by Janet English on her experience as a teacher in the US and Finnish education systems. Janet was awarded the Fulbright Distinguished Award in Teaching and the Presidential Award for Excellence in Math and Science Teaching. She holds a masters degree in education, teaches in southern California, and is the author of a blog called Finland from a teacher’s perspective.
I observed good teachers, some not so good teachers, and some great teachers in Finland – about the same quality I’ve observed in US schools; teacher quality is comparable. What is dramatically different is how our education systems are structured and what they are designed to achieve. We know that Finland consistently scores at or near the top of PISA results and we know that it’s partly because of their small class sizes and homogenous society, but their success can largely be attributed to the design of their educational system and how they implement their ideas to ensure each child’s success.
To help children realize their full potential, the Finnish education system employs the following strategies:
- The pace of student learning determines the pace of the curriculum.
- The child and his or her learning needs are the center of the educational process – everything else is considered support. If a student has trouble learning – even if it’s because the child can’t focus or if they are distracted because of family issues – that student is now considered to have “special needs.” Any Finnish child who is not successfully learning in school is considered to have “special needs” and that child will be given additional support. (It is expected that most students will require additional support at some time in their educational career.)
- Young children are provided an environment with a minimum of stress so their minds can be open to learning and taking intellectual “risks.”
- Play is a natural way for children to learn. For every 45 minutes of work in elementary school, children are given 15 minutes of play.
- Expectations are high and individual progress is nurtured.
- Schools across Finland are funded in an equitable manner and the system is funded so that every Finnish student will receive a good education at a good school, no matter where he or she lives.
- Teachers monitor student learning on a continuous basis so that assessment adds to student progress rather than detracting from it; students may have to evaluate discrepant events in science, evaluate convergent patterns in history, or compose a musical composition. Tests are not the main method of assessment so students do not spend substantial time taking tests or reviewing for them. Multiple-choice tests are generally not given because having students pick an answer from a list is not considered the best way to assess learning.
- National, sample-based assessments are used to ensure the education system is performing as needed, whereas teachers are responsible for assessing individual student progress in the classroom. The only compulsory national exam is given at the end of secondary school when students are approximately 18 years old.
- Most classroom lessons include problem-solving components and teachers purposely “leave something out” of lessons so students will have to solve the problem. (For example, one Finnish teacher asked her third grade students to make a painting of a Finnish forest in the moonlight. What did the teacher leave out? Brown paint. She provided the students with primary colors but her students had to figure out how to mix the paints to make brown.)
- Teachers strive to connect students emotionally and intellectually with the content so that students will be engaged in their lessons.
- Teachers are given the freedom to teach students in ways that best serve their students. Teacher professionalism includes knowing how children learn and then shaping that educational environment for optimal success. National education goals are determined by the needs of the society but the work of teaching and learning – and the pace and design of that process – is the work of the teachers.
- Students are given very little homework. (Three to six problems per night, on average.) Quality is more important than quantity.
- Compulsory education ends at age 15 and students have the choice to attend upper secondary school (high school), vocational school, or nothing at all (this last option is not advised). Vocational students can earn a professional certificate and be employable at the age of 18. Finnish citizens have the right to be re-educated and/or change their course of study at any point in their lives.
Finnish classrooms are typically quiet and, at a glance, remarkable only due to their small class sizes and well-behaved students. One has to spend many hours in Finnish classrooms to understand the teachers’ methods for helping students on their long road of intellectual progress. The beauty of the Finnish system lies hidden; their success has to be heard in the room’s silence and in the voice of the lessons as the teachers and students work together in their intellectual “dance.” By contrast, my American school seems to generate creative energy, excitement for learning, and optimism for the future; our classrooms are generally loud and full of discussion, activity, and commotion. American culture inspires creative thought and innovation and I see this being encouraged by many American teachers – especially the science and technology teachers.
Every child is unique – they don’t look the same, act the same, nor do they come to school with identical backgrounds or abilities; it’s not reasonable to believe they will process information at identical speeds or have identical learning needs. An education system is not about holding a competition where few students succeed, it’s about ensuring that all children are nurtured and inspired during their basic education and are prepared for further training and/or higher education. There are many paths to success but with more than 500,000 American students dropping out of high school per year, we clearly have to rethink our educational design for students who struggle and don’t fit into this poorly shaped mold we’ve created.
I’m now back in the U.S. and teaching in my high school classroom; once again, I’ve fallen in love with teaching. The students in my conceptual biology class are intelligent, compassionate, and they want to learn and be successful. But learning is difficult for them – it always has been – they’re the ones who typically don’t do well in this competitive American environment and I worry about their future. Will they graduate high school? Will they reach adulthood with the skills they need to be employable? Many of these students would be more productive if given a vocational school option at the age of 15 or 16 because technical schools are more aligned with their natural abilities; unfortunately, this full-time option is not available for them.
I’ve also noticed something remarkable; the students in my broadcast journalism class exhibit creativity beyond what I was able to see in any of the Finnish students I observed. Is this creative expression a mirror of American society? These students are, by any measure in the American system, highly successful students, but imagine what all students could achieve if America slowed down the pace of instruction and adopted the Finnish methods for optimizing students’ potential (as listed above), minimized memorization, and allowed students a broader field for their minds to create, “play,” and solve problems?
This is my dream – that every child is valued and needed for their ability to contribute to society and that our learning environments are constructed to help each child reach their full potential.
Americans have some important work to do – and to make a “play” on the competitive American spirit – the Finns already know how to do it and they are well on their way.
Finland from a teacher’s perspective Janet English’s blog
OECD Programme for International Student Assessment (PISA)
Today we publish the first of a two-part article by Janet English on her experience as a teacher in the US and Finnish education systems. Janet was awarded the Fulbright Distinguished Award in Teaching and the Presidential Award for Excellence in Math and Science Teaching. She holds a masters degree in education, teaches in southern California, and is the author of a blog called Finland from a teacher’s perspective.
Finland and the United States strive to provide meaningful and appropriate education for students but their methods for achieving this goal are quite different. I live and work in the United States but a Fulbright Program allowed me to visit Finnish schools for six months to learn how Finnish teachers teach problem solving skills; this newfound perspective gives me insight into how the educational systems of these two nations are structured and what helps children succeed (or not) within their boundaries.
America loves professional sports teams and Friday night football games, we compete at family picnics and our children play in afterschool sports. We love competing and we love winning. Education in the United States has come to mirror these competitive values – students are pushed to work until they’re exhausted, they struggle through hours of homework, and they compete for top academic honors. School curriculum proceeds rapidly because teachers follow pacing guides to ensure they’re on track for mandatory state tests. Students read a lot, write a lot, fill out worksheets, memorize vocabulary words, conduct labs, and oftentimes take weekly tests. Young children feel the pressure to perform and they can spend hours every night doing homework — even to the point of exhaustion and tears. Americans tend to believe that pushing students harder, making them do more work, and persevering for longer hours will somehow make them more successful in school, in business, and in life.
The American education system has become a form of, “survival of the fittest,” and this system does not serve all children well. Students who read well, learn quickly, and reproduce information without notes can be successful, but for every child who is successful, there may be five or more who struggle. A student who is two weeks behind in mastering math concepts, for example, will continue to fall behind as the teacher “keeps the pace” to cover new concepts, and there is little time for teachers to re-teach the material. Schools have tutoring sessions to assist struggling students but as students strive to catch up, their classes move forward to cover new concepts. How can struggling students learn old math concepts and master new concepts at the same time and at such a rapid pace?
“When you turn education into a race, which is essentially what we do [in the United States], you have to have many more losers than winners.” (John Holt, author of How Children Fail)
I recall a conversation with a Finnish teacher who asked me, “Do you find it interesting that America prides itself on the value of the individual but educates its children to be the same?” She found it strange that the educational system of a country that so values individuality would treat its children as interchangeable parts.
For illustration purposes, imagine a math class as a group of students learning how to clear a high jump – and the bar is moved upward at intervals predetermined by someone not working with these particular students. American teachers have very little flexibility for adapting the lessons for student progress because they have a predetermined schedule to ensure the curriculum is completed by the end of the year. Day after day, more and more students are unable to “clear the bar” but the bar keeps getting higher. If students can’t keep to this predetermined pace, should they be considered failures? (How can any child be considered a failure?)
Teachers know that children’s learning needs and academic potential are unique, and Finnish educational objectives are written to accommodate these differences. If the Finns had an objective for students to learn how to high jump (which they do not have), their objective would not specify that all students clear 1.8 meters, but would say something to the effect of, “Have students participate in track and field by learning to clear the high jump.” Teachers would then help students develop their full abilities for that objective. Finns have high expectations – but their expectations are based upon helping each child become their “best.”
The Finnish education system moves slowly because teachers know that developing young minds takes time and rushing that development is counter-productive. I asked teacher after teacher in Finland how they know when to proceed to the next topic and I was looked at with curiosity and told, “When the students have learned what they need to learn,” as if to say, “How can it be any other way? That wouldn’t make any sense.”
Tiina Tähkä from the Finnish National Board of Education told me, “I like [how] the core curriculum gives structure to the teachers [for] what things are expected but it doesn’t actually hinder the teachers to use their own ideas. Teachers have a lot of good ideas and when they process those ideas and share those with others they can create an even better school than we can here at the Board of Education.”
The Finnish education system is exemplary; it is gentle, forgiving, and nurturing for children, but it also holds high expectations for academic achievement. Students are continually monitored and lessons are optimized for student learning. Students are taught that it is their responsibility to learn in school. I asked a high school student how she knew when she was successful in class because student work is infrequently “graded,” and she looked at me as if I were asking a ridiculous question. “I know I’m learning when I’ve learned the material,” she said. “If I don’t learn it, it’s my own shame.” Finnish students are taught from a very early age to be responsible for their own learning and to ask questions when they need help.
Children in the American system have to learn quickly, but Finnish children progress slowly. Where American teachers frequently administer multiple-choice tests for assessment, Finnish teachers require students to produce something that reflects their learning. Where American students and parents want (and expect) frequent grade updates, Finns are patient for students to learn and families receive grade updates about every seven weeks. (I didn’t find any online grading programs in Finland.) Where American schools are not equitable, Finnish schools are designed and supported so that each child has a good school, can develop to the best of their abilities, and can be employable when they reach adulthood.
Finland from a teacher’s perspective Janet English’s blog
OECD Programme for International Student Assessment (PISA)
Regular Insights blogger Brian Keeley is in Beijing, from where he sends this dispatch.
A recent afternoon brought one of those classes that all lecturers dread: Glazed eyes from one side of the room to the other, and mouths opening and closing in syncopated yawning. Time to tear up the lesson plan and throw out a question: “Hey, did you see the story about the rich kid who beat up that nice couple?” Dull eyes sharpen, slack jaws tighten. Yes, the students have heard about it and, what’s more, they have something to say.
In case you missed the story, here’s what happened: On a recent evening, a middle-class couple was driving home in Beijing. Quite reasonably, they slowed to take a corner, forcing a couple of cars behind them to stop. Incensed, the drivers of the two following cars got out and beat them up.
Road rage, but that was only the half of it: It turned out that one of the drivers was just 15 years old, which meant he was driving his car – a BMW – illegally. Not only that, he warned onlookers against intervening: “Who dares to call the police?” he supposedly shouted. His cockiness can probably be explained by his family connections: The boy is the son of a celebrity army general, Li Shuangjiang, who shows up regularly on TV to sing patriotic ditties.
In the wake of the incident, Major-General Li was put through the media wringer. He visited his son’s victims in hospital, apologized abjectly, and said of the boy, “I didn’t him give a good upbringing.” As for Li junior, Chinese media reports that he’ll go to a correctional facility for a year, but will escape criminal charges because of his age.
The affair was startlingly reminiscent of another incident last year, when the well-connected son of a senior security officer knocked down and killed a university student. That young man, too, shouted a warning to onlookers: “My father is Li Gang.” His words became a national catchphrase, epitomizing what many Chinese seem to feel is the attitude of an arrogant elite that feels itself above the law.
Certainly, that was the feeling of most of my students. But there was a second strand of opinion: They felt that media reporting of these incidents, and subsequent online commentary, was sensationalist and served no bigger purpose than stirring up bitterness and resentment. “The media should ask itself, ‘why are we reporting this?’,” said one student. “It should think about the bigger social question, and try to make China better.” That, of course, was one of the traditional role assigned to the media by the Chinese Communist Party. But in today’s China, it’s sensationalism – not worthiness – that sells papers.
As for the “bigger social question,” the student isn’t alone in seeing the incident as symptomatic of more than just Beijing’s awful road manners. Many in China worry about the impact of widening inequality on social stability, even if these concerns are expressed in careful language. But whenever you hear China’s leaders referring to the need for a “harmonious society,” it’s usually inequality that’s being talked about.
China was not the only country that got a reminder last week of the risks of “unharmoniousness”. In the United States, there was fresh evidence of how society there has been reshaped over the past decade or so. The middle class, once the solid core of American life, is being hollowed out, leaving a class structure that’s now shaped more like an hourglass. Indeed, some retailers have reportedly rejigged their product lines to focus on either the top, or the bottom, of the economic pile.
The impact of this social shift goes beyond determining what’s on Walmart’s shelves. As the historian John Gray notes, there’s a real danger in undermining the middle class (a risk first identified by Karl Marx): “In the process of [capitalism’s] creative destruction,” says Gray, “the ladder has been kicked away, and for increasing numbers of people a middle-class existence is no longer even an aspiration.” The result, he argues, is the destruction of “the way of life on which capitalism in the past depended”.
That’s not true of China, or at least not yet. The middle class may be under pressure in many developed countries, but in China it’s growing by leaps and bounds. But as Gray suggests – and as the financial crisis of the past few years has shown – the economic impact of capitalism’s forces are less easy to tame than we might wish. And as recent news from both China and the United States suggests, their effect on our societies can be just as tricky to manage.
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Around the world, 3.3 million university-level students study abroad. The biggest number come from China, and the most popular destination is the United States. What are their lives like?
In this guest posting, Yeran Zhou, an 18-year-old from Shenzhen in southern China, reflects on his first semester in the U.S.
Mr. Zhou blogs for the Daily Illini, a student newspaper at the University of Illinois.
On August 14, 2010, I boarded a 14-hour flight to America, leaving China for the first time.
I had never been to America before, but people always said I would fit in, mainly because I argued with my teachers and insisted I wanted to be a filmmaker. So when I was 10, my parents had sent me to weekend classes taught by foreign tutors. After school I spent all my pocket money on pirated Hollywood DVDs and watched every episode of Friends. Soon I concluded that America was a rich and cool country with lots of kids like me.
In ninth grade, I got a taste of how life would be if I stayed on in Chinese education when I took the Zhongkao, a two-day-exam to determine which high schools we could go to. A year of test cramming exhausted me. Upon graduation, the principal told us a harder, crueler test – the Gaokao – awaited us in three years. And that was when I decided I had to go abroad.
My high school in Shenzhen had a tradition of sending students overseas. Every year some would come back and tell their stories. They said that Chinese students in the U.S. were notorious for only hanging out with each other, but “it can’t be helped”. So when I arrived in America, I was eager to set myself apart from my Chinese peers. I took literature classes, went to dance parties, learned Ultimate Frisbee and blogged for the college newspaper. In other words, I couldn’t wait to be American.
But as it turned out, movies and sitcoms didn’t prepare me for everything in America. In the first week on campus, I was shocked by everyone’s fear of being labeled “antisocial”. Closing the dorm doors was strictly forbidden, and eating alone was to be avoided at all cost. In orientation, there was “Speed Friending”, an activity that turned my brain into an alphabet soup of names and faces.
Back in China, things had worked very differently. Our class of 40 students spent every day together for three years. No one was anxious to make new acquaintances, but everyone always had a couple of intimate friends to talk to.
My old Chinese friends had discussed politics and philosophy, but my new American friends exchanged puns and jokes. American humor was a mystery to me, so a few anxious giggles were usually my only contribution to their conversation. But eventually I discovered that Americans weren’t that hard to impress. “In China there’s no minimum drinking age and I used to get drunk after class,” I would remark casually, and watch their jaws drop.
Meanwhile, the classes were showing me America in a new light. My law professor was infuriated by how often American lawyers put the wrong people in jail. A large part of my literature class was devoted to all the bad things America did to women, immigrants, Native Americans and black people. During discussions my classmates confessed that they somehow felt guilty about being American and growing up in an all-white neighborhood.
I was exhilarated. After all those years spent in a Chinese curriculum, hearing people criticize their own country in class was liberating. With this new freedom to think for myself, I grew more curious and confident every day. I also discovered a passion for books and writing, and spent night after night reading in the library.
I was adjusting to life in America, but it came with a price. In order to distinguish myself I shunned my Chinese peers, who mostly stayed to themselves. Often I pretended I didn’t speak Chinese at all. One month into the semester, I hadn’t made a single friend from my own country, yet the newspaper editor asked me to blog about Chinese students in America. So I set off to reconnect with my Chinese classmates.
For weeks, I sought them out at coffee shops, in cafeterias, and even on a Chinese social networking website. They told me they were isolated, troubled or sleep-deprived. Some were terrified of reading and writing assignments. Others were frustrated by not being able to fit in.
A senior engineering student, for example, told me that it was his father who had made the decision to send him abroad, who chose his school and major, prepared all the paperwork and even wrote the application essay. After coming to America, he avoided all contact with non-Chinese people and spent most of his time alone in the dorm room.
Like him, many Chinese students had been sheltered all their lives. Schools and parents had protected them from life’s choices and uncertainties. Then, suddenly, they found themselves in America, alone and unprepared, caught in a swirl of incomprehensible foreignness.
At the end of my first semester, I no longer tried to pretend to be the same as my American friends. But neither could I say that I truly understood my Chinese peers. So I decided to keep on writing, to tell the stories of my Chinese classmates that they wouldn’t otherwise tell, so that one day the world around me might reconcile.
OECD work on China
The OECD’s Chinese-language site – 网站(中文)
Tourism is an important player in the worldwide economy: In 2009, it accounted for just over 9% of global GDP and employed about one in twelve workers, according to the World Travel and Tourism Council.
As a sector, international tourism has been growing at a slightly faster pace than the world economy. Despite the recession and the downturn in tourism numbers,
that trends looks likely to continue over the long-term. Employment in tourism is also growing relatively strongly: Between 2000 and 2007 in OECD countries, the growth rate for employment in hotels and restaurants was over 2% per year, more than a percentage point ahead of the total employment growth rate. (more…)
If the beaches seem a little less crowded in the last couple of years, don’t be too surprised. International tourism took a knock during the global recession, as our charts show, with annual growth slipping to just 1.9% in 2008, or 5.2 percentage points lower than the growth rate registered during the previous four years. By the time figures for 2009 are finalised, they may show an actual decline of over 4%. That’s to be expected: International travel tends to respond quite sharply to economic slowdowns, while domestic tourism (people holidaying in their own countries) is more resilient. In OECD countries, about three out of four tourists are domestic. There have been some signs of growth in the first half of 2010, though whether this spells a recovery or reflects a particularly weak 2009 remains to be seen.
Despite any recent declines, tourism remains one of the world’s great growth industries. According to the UN’s World Tourism Organisation, just 25 million people travelled abroad for holidays in 1950. Today, the figure is more than 800 million, representing an annual growth rate of about 6.5%.
Just as it’s been for the past 15 years, France remains the world’s favourite destination, attracting just under 80 million visitors in 2008 (the most recent year for which full data is available). The United States is second, with about 58 million visitors from abroad, while Spain is third, with just over 57 million.