Did you know…

  • More than 1.7 billion people around the world are unbanked and can’t access the financial services they need. (1)

  • Youth (aged 15 to 24) in sub-Saharan Africa are twice as likely to be unemployed compared to any other age group. (2)

  • 67% of adults worldwide are NOT financially literate. (3)

  • Youth unemployment is one of the biggest challenges facing our global economy… 73 million young people between the ages of 16 and 24 are unemployed, a 6% increase since 2007. (4)


Youth Unemployment is a Problem

The ILO’s World Employment and Social Outlook 2016, Trends for Youth report shows that as a result, the global number of unemployed youth is set to rise by half a million this year to reach 71 million (table 1) – the first such increase in 3 years. (5)

Of greater concern is the share and number of young people, often in emerging and developing countries, who live in extreme or moderate poverty despite having a job. In fact, 156 million or 37.7 per cent of working youth are in extreme or moderate poverty (compared to 26 per cent of working adults). (5)

“The alarming rise in youth unemployment and the equally disturbing high levels of young people who work but still live in poverty show how difficult it will be to reach the global goal to end poverty by 2030 unless we redouble our efforts to achieve sustainable economic growth and decent work. This research also highlights wide disparities between young women and men in the labour market that need to be addressed by ILO member States and the social partners urgently,” said Deborah Greenfield, ILO Deputy Director-General for Policy. (5)


Financial Literacy Around the World

Why it’s important:

Without an understanding of basic financial concepts, people are not well equipped to make decisions related to financial management. People who are financially literate have the ability to make informed financial choices regarding saving, investing, borrowing, and more. (6)

Country-level financial literacy ranges from 71 percent to 13 percent

In the S&P Global FinLit Survey, the literacy questions that measure the four fundamental concepts for financial decision-making—basic numeracy, interest compounding, inflation, and risk diversification—are as follows. (The answer options are in the brackets, with the correct answer in bold.) (6)

RISK DIVERSIFICATION

Suppose you have some money. Is it safer to put your money into one business or investment, or to put your money into multiple businesses or investments? [one business or investment; multiple businesses or investments; don’t know; refused to answer] (6)

INFLATION

Suppose over the next 10 years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy today? [less; the same; more; don’t know; refused to answer] (6)

NUMERACY (INTEREST)

Suppose you need to borrow 100 US dollars. Which is the lower amount to pay back: 105 US dollars or 100 US dollars plus three percent? [105 US dollars; 100 US dollars plus three percent; don’t know; refused to answer] (6)

COMPOUND INTEREST

Suppose you put money in the bank for two years and the bank agrees to add 15 percent per year to your account. Will the bank add more money to your account the second year than it did the first year, or will it add the same amount of money both years? [more; the same; don’t know; refused to answer] Suppose you had 100 US dollars in a savings account and the bank adds 10 percent per year to the account. How much money would you have in the account after five years if you did not remove any money from the account? [more than 150 dollars; exactly 150 dollars; less than 150 dollars; don’t know; refused to answer] (6)

A person is defined as financially literate when he or she correctly answers at least three out of the four financial concepts described above. We choose this definition because the concepts are basic and this is what would correspond to a passing grade. Based on this definition, 33 percent of adults worldwide are financially literate. This means that around 3.5 billion adults globally, most of them in developing economies, lack an understanding of basic financial concepts. These global figures conceal deep disparities around the world. (6)

Global Financial Literacy Rates