Financial literacy may be broadly defined as the ability to understand and effectively use financial information. This presentation offers a comprehensive review of current approaches to measuring financial literacy and proposes a revised conceptual framework aimed at bridging the gap between its theoretical definition and empirical measurement.
Financial literacy is a multidimensional construct comprising five distinct dimensions, as identified by the OECD (2022): objective financial knowledge, subjective financial knowledge, financial attitudes, financial behaviours, and financial skills. Ideally, each of these dimensions should be assessed across nine key content domains, as proposed by Yakoboski et al. (2024): earning, consuming, saving, investing, borrowing/managing debt, insuring, comprehending risk, go-to information sources, and retirement fluency.
This paper systematically reviews how each dimension has been conceptualized and operationalized in the academic literature, examining whether existing instruments adequately capture the full spectrum of content domains. The analysis reveals significant gaps and inconsistencies: some dimensions are better represented than others, and few tools succeed in encompassing the breadth of relevant financial topics.
In response to these findings, we propose a revised conceptual framework for financial literacy. The updated model retains four of the five OECD dimensions—excluding financial skills, which are considered transversal rather than finance-specific—and focuses on seven of the nine content areas. The two excluded domains (comprehending risk and go-to information sources) are reclassified as general skills rather than strictly financial components.
This revised framework contributes to the development of more precise, balanced, and conceptually aligned tools for measuring financial literacy, with implications for both academic research and policy design.