From classroom to cash : exploring financial literacy in Indonesian students

Abstract

Purpose This study investigates how financially literate Indonesian students are, and how Indonesian students’ attitudes toward financial matters are, based on the data of the Program for International Student Assessment (PISA) 2018.

Design/methodology/approach Analyzing responses from 3,158 15-year-old students across 43 items for the Financial Literacy Cognitive Assessment and 7,001 respondents across 85 items for the Financial Literacy Survey, the study employs the Rasch Partial Credit Model in WINSTEPS 3.73 for analysis.

Findings Results indicate a varied performance among students, with scores ranging from −4.20 logit to 2.26 logit and an average score of −0.82 logit. Approximately 48.5% of students scored above this average, highlighting a need for targeted financial education, particularly in complex areas like company profit and repayment scores. Despite familiarity with concepts like “wage” and aspirations for entrepreneurship, concerns arise about insufficient financial education from parents and teachers, indicating a necessity for enhanced financial management skills and awareness among students, regardless of gender.

Research limitations/implications This study advances research by using the Rasch model to reveal gaps between student confidence and actual financial skills. It highlights the need for progressive financial education based on ability levels. Future studies should track changes over time and compare results by region, school type or socioeconomic background. The small gender gap in attitudes also invites qualitative research to explore underlying factors influencing students’ financial behaviors.

Practical implications Findings call for stronger integration of financial literacy in schools. Students’ low performance indicates a need for age-appropriate, skill-building instruction. Teachers should receive targeted training, and lessons should link financial concepts to real-life applications like budgeting or entrepreneurship. This approach helps students apply knowledge practically and develop responsible financial attitudes.

Social implications Students receive limited financial guidance outside school, showing the importance of broader community involvement. Parent education, local workshops and partnerships with religious or civic groups can support financial learning. These efforts ensure students gain financial knowledge not only just in classrooms but also in everyday life settings.

Originality/value This study is the first to examine Indonesian students’ financial literacy using a large-scale, psychometrically rigorous approach. Unlike previous research that focuses on cross-country comparisons or gender disparities, it provides a nationally focused analysis combining cognitive and attitudinal measures through Rasch modeling. By offering detailed insights into students’ strengths and weaknesses, the study fills a significant gap in the literature and lays the groundwork for context-specific educational reforms in financial literacy.