ENTREPRENEURSHIP EDUCATION IN THE CONTEXT OF VOCATIONAL, ECONOMIC, AND BUSINESS EDUCATION

Transcription

1 Financial literacy based on an oxymoron a look behind the concept of the OECD PD Prof. Dr. Georg Tafner, M.E.S., M. phil. Head of the Federal Center for Professionalization in Education Research, Professor for Education Research and Socioeconomic Education at the University for Teacher Education Styria, Privatdozent at the Humboldt-Universität Berlin. ENTREPRENEURSHIP EDUCATION IN THE CONTEXT OF VOCATIONAL, ECONOMIC, AND BUSINESS EDUCATION 1

2 The Dimensions of Vocational, Ecomonic and Business Education (Tafner 2015) Business and Vocation Pedagogy Economy and Economics Society Ethics Civic Education incl. global and European dimension Entrepreneurship Education Vague concept many approaches Dimensions (Weber et al. 2014): academic knowledge skills attitudes reflection on situations There is no single best way to convey entrepreneurial contents and accordingly, there is no particular learning theory or didactical method, especially suited to entrepreneurship education. An instructional strategy can only be judged as good or bad with regard to the goal achievement of the learners. (Weber et al. 2014, 311) 2

3 Financial literacy Vague concepts Many definitions Part of general economic education as well as vocational and business education Part of entrepreneurship education Text 1 Text 2 3

4 2005 Definition Financial Education Financial education is the process by which financial consumers/investors improve their understanding of financial products and concepts and, [ ] develop the skills and confidence to become more aware of financial risks and opportunities, to make informed choices [ ] to improve their financial well-being. (OECD 2005, 13) 4

5 Definition Financial Litracy Financial literacy is knowledge and understanding of financial concepts and risks, and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts To improve the financial well-being of individuals and society, and to enable participation in economic life. (OECD 2013, 144) [ Text 3] EFFICIENT MARKET THEORY INTRODUCTION 5

6 OECD 2005: OECD 2005: Financially educated consumers (35) help increasingly complex financial markets to operate efficiently enhance competition encourage providers to develop new products are more likely to save are better to protect themselves on their own report misconducts by financial intermediaries to the authorities are simple less vulnerable to fraud and abuse (Greenspan 2003) can help ensure that the financial sector makes an effective contribution to real economic growth and poverty reduction As a result, there would be reduced regulatory burden on firms. 6

7 OECD 2013: There is mounting evidence that those with higher financial literacy are better able to manage their money, participate in the stock market and perform better on the their portfolio choice. (2013, 141) All of these factors will lead to a more efficient financial services sector. (2013, 141) Financial crisis google search: ca. 61 Mio. results OECD 2013: 0 in the text Finance and economic crisis 7

8 The crisis in OECD 2014: The crisis in the text During assessment [ ] economies were grappling with the effects of the crisis economic crisis has only increased the urgency of investing in [ ] skills (OECD 2014, 3) no paradigm shift Financial Services Authority, Great Britain (FSA) before the crisis: Market prices are good indicators of rationally evaluated economic value. The development of securitized credit [ ] has improved both allocative efficiency and financial stability. [ ] The risk characteristics of financial markets can be inferred from mathematical analysis, delivering robust quantitative measures of trading risk. Market discipline can be used as an effective tool in constraining harmful risk taking. Costumer protection is best ensured [ ] by ensuring that wholesale markets are as unfettered and transparent as possible. [ ] (FSA 2009, 39) 8

9 FSA after the crisis: Each of these assumptions is now subject to extensive challenge on both theoretical and empirical grounds, with potential implications for the appropriate design of regulation and for the role of regulatory authorities. (FSA 2009, 39) EFFICIENT MARKET THEORY 1) RISK 9

10 s + d s + d s + d s + d s + d Price Price Price Price Price Price Price Price Price t -3 t -2 t -1 t 0 t 1 t 2 t 3 s + d s + d s + d s + d s + d Price Price Price Price Price Price Price Price Price t -3 t -2 t -1 t 0 t 1 t 2 t 3 Text 5 10

11 unrecognisable cloudiness uncertainty risk range of uncertainty certainty event consequence probability point in time available information Text 4 EFFICIENT MARKET THEORY 2) MARKETS AND GROWTH 11

12 Oxymoron of financial literacy An efficient and deregulated market Controlled by financially educated consumers Economic growth and savings The increase in savings associated with greater financial literacy should have positive effects on both investment levels and economic growth. (2005, 35) Text 6 Paradigm 1: Financial Education and Consumer Production are complements. Paradigm 2: Consumer Production is a safety net for financially uneducated people. Conclusion A: Financially educated consumers do not need consumer production. Conclusion B: If all are financially educated no consumer production is necessary. Conclusion C: Free markets. 12

13 Neo-classical capital market Interest i I = S Supply = saving (i) Output Demand = investment (i) capital The interest rate coordinates the market and transfers savings into investments. capital Neo-classical capital market Interest i Supply = saving(i) I = S capital Demand = investment (i) Output More savings higher output capital 13

14 Keynes view Interest i Supply = saving (Y) I = S Demand = investment (i, expectations) Output capital capital Savings are the result of higher income Higher consumption = higher growth More growth enables savings Keynes view Interest i Supply = saving (Y) I = S Demand = investment (i, expectations) Output capital More growth enables savings capital 14

15 Crisis and efficient market theory Actually, the meltdown of the financial market in autumn 2008 should have discredited the so-called efficient market theory for all times. However, I doubt that this is the case. (Skidelsky 2010, 13 deutsche Version, translated by Tafner) LITERACY 15

16 16

17 Score y = 0,0015x + 447,73 R² = 0, GDP per capita 17

18 Score y = 3E-05x + 494,05 R² = 0, GDP per capita GDP per capita y = 108x R² = 0, Score 18

19 y = 5,6289x R² = 0, GDP per capita y = 108x R² = 0, Score Financially educated consumers can help ensure that the financial sector makes an effective contribution to real economic growth and poverty reduction. (OECD 2005, 35) 19

20 competences Efficient financial investment competences teacher class room education students efficent financial investment 20

21 competences teachers class room education students efficient financial investment GDP competences teachers class room education students efficient financial investment GDP 21

22 ? competences????? teachers class room education students efficient financial investment GDP? Financially educated consumers can help ensure that the financial sector makes an effective contribution to real economic growth and poverty reduction. (OECD 2005, 35) Summary: Davies a wider understanding of financial literacy Micro- Meso- Macro-Level ethics Conclusio: Financial Literacy is connected with political education Financial Literacy is part of economic education Financial Literacy is connected with ethics 22

23 Insolvency 2013, Germany Unemployment Divorce, death of the partner Illness, addiction and accidents Inefficient household management Failed entrepreneurship (selfemployed) Statistisches Bundesamt (2013) Insolvency, Austria 2014 Unemployment and less income Failed entrepreneurship (self-employed) Inefficient household management Divorce, death of the partner New appartement our house Schuldnerberatung (2015) 23

24 Thank you! PD Prof. Dr. Georg Tafner 24