Financial Literacy and Mathematics: A Study among Young Mexican High School Students

Abstract

This work analyzes the influence of mathematical skills on financial literacy among Mexican high school students between 15 and 18 years of age. We use data from a survey constructed explicitly for this purpose, based on measures suggested by Lusardi and Mitchell and the Organisation for Economic Cooperation and Development (OECD). This is the first study of its kind for Mexican youths. Our results confirm that financial literacy levels among Mexican students are low. We offer evidence on the significant and positive impact of mathematical skills on financial literacy levels. Using an Ordered Probit model, we find that for every one unit increase in correct mathematical answers, the financial literacy level rises by 0.12 deviations. Intuitively, two additional correct mathematical answers translate into one-half of a point in the general OECD score. Our results are robust to different specifications for the explanatory variables and different estimation methods. Nevertheless, the study might have an endogeneity due to omitted variables or measurement error, for which we propose a method to correct it. The influence of mathematical skills remained significant and positive despite it. JEL Classification: D91, D1, I22.