A Comparative Study on the Financial Literacy of Korean and Japanese College Students

This study compares Korean and Japanese college students financial literacy to identify their relative strengths and weaknesses, as well as subject matters of poor understanding. Overall, Korean students perform significantly better on a financial literacy test than Japanese students. Korean students demonstrate relative weakness on concepts such as insurance, the relationship between education level and income, the source of national pension, credit scores, and cost-benefit analysis. Korean students also struggle with auto insurance coverage and the relationship between interest rates and bond prices. The results suggest that the determinants of financial scores differ significantly between students from the two countries, with some coefficient estimates having opposite signs. For Korean college students, majors in economics or related fields and students with a positive attitude toward money are significantly more likely to be knowledgeable about personal finance. In addition, a family s economic status, reading economic news, math skills, and investment experience are significant predictors of an individual s financial literacy.