CC BY
11УДК 371.39 Kapezov Sh., Dyussenov N., Zhumagozhayev K.
Kapezov Sh.
master's student of Applied Data Analytics Astana IT University (Astana, Kazakhstan)
Dyussenov N.
master's student of Applied Data Analytics Astana IT University (Astana, Kazakhstan)
Zhumagozhayev K.
master's student of Applied Data Analytics Astana IT University (Astana, Kazakhstan)
A COMPARATIVE ANALYSIS OF FINANCIAL LITERACY EDUCATION IN KAZAKHSTAN AND WESTERN COUNTRIES: BRIDGING THE GAP IN SCHOOLS OR HIGHER EDUCATION
Аннотация: this study compares financial literacy education in Kazakhstan and Western countries. Many students, especially in Kazakhstan, struggle with basic financial topics like budgeting and balance sheets. Kazakhstan has made progress, but more needs to be done. In Western countries, financial literacy has been taught for a longer time, but the quality of education can still vary. This research looks at the gaps in both systems and suggests ways to improve financial literacy in Kazakhstan by learning from US and European countries . The study also suggests the need for better policies, newer school programs, and cooperation between different sectors to help students gain the skills they needfor a stable financial future.
The object of this research is the financial literacy education systems in Kazakhstan and Western countries. The focus is on how well these systems teach high school and university students to handle their finances, make good decisions about loans. The research aims to find out why
financial literacy is lower in Kazakhstan and suggest ways the country can improve its financial education by looking at what works in Western countries.
Ключевые слова: financial literacy, financial education, education systems, cross-country comparison, educational gaps.
Introduction.
Financial literacy is often incomplete or insufficiently taught. In today's complex financial environment, the skills to navigate and structure personal finances have become essential. Studies show that most of the global population lacks financial literacy, with many individuals holding multiple loans without understanding how to manage them properly [1]. This issue primarily affects younger populations, including high school and college students, in both Kazakhstan and Western countries, where financial literacy education is not yet consistently integrated into school curricula [2].
The goal of this study is to examine the disparities in financial literacy education between Kazakhstan and Western countries and propose solutions to address them. Kazakhstan has been making improvements in increasing financial literacy during the last years, although there are still a lot of things to do. Based on the research by OECD, Kazakhstani students have lower financial literacy skills on average than their counterparts living in the western countries, having many students struggling with understanding basic financial concepts, such as loans, interest rates, and budgeting (OECD, 2019). This shortcoming raises the need for basic financial literacy programmes in schools and/or universities across the country. Government addressed this problem by proposing an initiative that aims at introducing financial literacy programmes into school curriculums (Ministry of Education of Kazakhstan, 2022).
On the other hand, many developed countries, such as the USA and UK have a longer history of financial literacy education in their school systems. However, there are significant differences in the quality and availability of this subject in those countries. Research shows that students who get financial literacy education in college are more likely to make informed financial decisions later in life, including choosing
appropriate loan options for higher education and managing their debts responsibly. (Lusardi & Messy, 2023).
How do financial literacy levels differ between students in Kazakhstan and Western countries and what factors cause these differences? Addressing the financial illiteracy problem requires a comprehensive approach that includes policy reforms, education programs renewal. It is important not only to equip students with knowledge needed to manage their personal finances, but also to promote long-term economic stability at national level.
Literature Review.
The level of financial literacy is different in countries. Developing countries like Kazakhstan have bigger problems than Western countries. This review looks at studies about financial education in Kazakhstan and Western countries. It checks how these programs change people's money habits and how good they are.
Kazakhstan has very low financial literacy, especially in rural areas. Gaisina and Kaidarova (2017) found that many people in rural areas don't understand basic things like saving, which causes problems with managing money [4]. Bayakhmetova et al. (2023) say that poor financial literacy also stops people from making good investment decisions, which hurts economic growth [5]. In contrast, countries like the US and some parts of Europe have better financial literacy because of good educational programs. Zhu et al. (2019) showed that teaching financial literacy in schools makes students understand money and behave better with it [6]. Also, Lusardi and Messy (2023) say that higher financial literacy in Western countries leads to better financial health [9].
The Consumer Socialization Theory says that people learn financial habits from family, friends, and media, as well as from school. Ergun (2018) found that European students who learn about finance in universities know more about financial topics [7]. But in Kazakhstan, formal financial education is still new, so people learn more from their social groups, especially in rural areas [4]. The Life Cycle Hypothesis (LCH) explains how people make financial decisions over their lives. Zhu et al. (2019) showed
that being financially literate helps people save money and build wealth [6]. Haliassos et al. (2019) also found that financial literacy helps people make better saving and investing decisions [10].
Recent studies, like those by Zhu et al. (2019) and Cannistra et al. (2022), give good proof that financial literacy programs help young people [6][8]. But most research focuses on developed countries, and there isn't enough research on how these programs work in countries like Kazakhstan. Bayakhmetova et al. (2023) say that developing countries need financial education programs that fit their specific economic problems [5]. Lusardi and Messy (2023) agree, saying that general financial education programs are useful but need to be adapted for each country [9].
In Western countries, financial literacy is part of school programs. Zhu et al. (2019) found that even short programs in high schools can improve students' understanding and decision-making about money [6]. Ergun (2018) showed that university-level programs in Europe have a long-lasting impact on students' financial habits [7]. In Kazakhstan, efforts to teach financial literacy are still new. Bayakhmetova et al. (2023) say there should be more programs that focus on different groups of people [5]. Haliassos et al. (2019) also say that these programs need to be designed to fit local cultures and economies to be effective [10].
To sum up, Western countries have made good progress in improving financial literacy with their education programs. Kazakhstan is still working on creating similar strategies. To help people with their finances, Kazakhstan needs to create programs that fit the needs of its people, especially those in rural areas. Future research should check how good these programs are and explore other ways to teach financial literacy across the country.
The studies below help us understand financial literacy in different contexts, offering both theories and real data. In 2020, Panos and Wilson [15] discussed how financial technology (FinTech) changes financial education. They say it's crucial to include FinTech in financial literacy courses, especially in emerging economies like Kazakhstan, where digital tools can improve education. They also suggest that
governments should support financial literacy through policies, which can help guide educational programs in Kazakhstan and Western countries.
Karakurum-Ozdemir et al. [16] look at financial literacy in middle-income countries, identifying groups like women and young adults who often have lower financial literacy levels. Their research shows that financial literacy improves with education, a trend seen in Western countries too. The study points out that differences in financial literacy across different regions could inform better policy-making in Kazakhstan and Western nations.
Swiecka et al. [17] study financial literacy among high school students in Poland, emphasizing the value of starting financial education early. They find that most Polish students have good financial knowledge, though differences in financial behavior between genders exist. The study highlights that knowing about finances isn't enough, practical financial behaviors are also crucial.
Urban [11] looks into whether state-required financial education affects high school graduation rates. The study finds that these financial education requirements don't hinder graduation, regardless of the student's race, gender, or family income. This suggests that financial literacy programs can be implemented without negatively impacting education, reassuring that such programs can improve financial outcomes.
In 2024, Ferrill and Curtin [12] discussed financial education policies in Massachusetts, showing how they help improve financial literacy. They recommend using standalone courses, providing resources, and promoting hands-on learning as effective ways to teach financial education.
Lusardi, Mitchell, and Yu [13] argue that financial literacy should be seen as a vital skill and included in school curriculums. They believe that isolated efforts aren't enough to address broader financial decision-making issues. Their findings suggest that comprehensive programs and treating financial literacy as a significant economic indicator are crucial for improving national well-being.
Klapper and Lusardi [18] point out that around the world, only one in thradults really understands basic financial concepts. Their research shows that women, people with lower incomes, and those with less education often know less about finances,
which makes them more at risk in complicated financial markets. This shows how important it is to have special financial education programs for people in both developing and developed countries.
Abad-Segura and González-Zamar [14] connect financial literacy with creative entrepreneurship. They find that financial education boosts entrepreneurial skills, important for developing economies like Kazakhstan. Their study highlights the need to integrate financial literacy into broader educational strategies that also encourage creativity and entrepreneurship.
To sum up these studies, it is clear that financial literacy is crucial for financial well-being, but how to achieve high literacy rates varies across countries. While Western countries may have more developed financial markets and face different challenges, the importance of early education, regional differences, and gender gaps are common themes that both Kazakhstan and Western countries can address to improve financial literacy education.
Methodology.
This study uses a qualitative comparative analysis framework to examine financial literacy education in Kazakhstan and Western countries. The methodology involves thrmain methods: secondary data analysis, document analysis, and comparative analysis.
Data Collection.
The main sources for this study include 15 peer-reviewed papers focusing on financial literacy in Kazakhstan and Western countries. These articles were chosen for their relevance to educational programs, literacy outcomes, or cultural perspectives on financial literacy. To gather these studies, a comprehensive search was conducted on Google Scholar, filtering the results to include only reliable and relevant sources.
1. Secondary Data Analysis.
The research starts with a detailed review of current literature and statistical reports on financial literacy education in both Kazakhstan and Western countries. Key data sources include:
• Reports from international organizations like the OECD [1], offering insights into financial literacy levels and practices in different areas.
• National data from Kazakhstan's Ministry of Education [2] on the impact of financial literacy programs in schools and universities.
• Academic studies examining financial literacy rates and educational strategies in the U.S., UK, and other Western nations. This analysis highlights trends, gaps, and effective practices in financial literacy education across various regions.
2. Document Analysis.
This part of the study focuses on analyzing documents related to financial literacy education policies and frameworks. Relevant documents include:
• Curriculum frameworks and educational policies from Kazakhstan and selected Western countries, detailing the goals and content of financial literacy programs.
• Official reports and policy papers from government and educational organizations describing efforts to improve financial literacy.
• Case studies of successful financial literacy programs in Western countries, examining their structure and outcomes. By analyzing these documents, the research aims to identify key features of successful financial literacy programs that could benefit Kazakhstan.
3. Comparative Analysis.
After gathering and reviewing data and documents, a comparative analysis will be conducted to find similarities and differences between financial literacy education in Kazakhstan and Western countries. The comparison will cover:
• Curriculum Content: Which financial topics are prioritized in these programs?
• Teaching Methods: How are financial literacy concepts taught, and are there differences in teaching styles?
• Assessment and Outcomes: How is financial literacy measured, and what are the outcomes in students' financial behaviors? This analysis uses criteria based on the literature review to assess the effectiveness of financial literacy programs in both contexts.
4. Synthesis of Findings.
The final step synthesizes insights from the data and document analyses to offer recommendations for improving financial literacy education in Kazakhstan. The goal is to identify best practices from Western countries that can be adapted to fit Kazakhstani students' needs, especially for addressing regional differences in financial literacy. Additionally, ethical issues related to financial illiteracy in Kazakhstan, such as the rise of microloans, credit use, and property pledges, could also be discussed.
Conclusion.
This methodology provides a thorough understanding of financial literacy education frameworks and practices without collecting primary data. The findings aim to guide the development of strategies to bridge the financial literacy gap in Kazakhstan.
Findings/Results.
Financial Literacy Levels in Kazakhstan vs. Western Countries: Key Differences.
Students in Kazakhstan generally know less about financial matters than students in many Western countries. For example, about 65% of high school students in Germany understand important financial ideas well based on financial education in schools [19]. In Kazakhstan, many students do not have this knowledge, which makes
them rely on high-interest microloans for daily needs, leading to more debt [20]. This shows that Kazakhstan needs to improve its financial education to match international standards.
Impact of Financial Education on Decision-Making.
Financial education plays an important role in how students handle their money in both regions. In Canada, nearly 75% of young adults aged 18-34 feel confident about managing their finances because of strong financial education in schools [21]. In contrast, many students in Kazakhstan struggle with money management, often making poor choices like using too much credit and not saving enough [5]. Research suggests that special financial literacy programs could help young people in Kazakhstan make better financial decisions and rely less on expensive loans [5].
Policy and Curriculum Differences.
There are clear differences in how financial education is handled in Kazakhstan compared to Western countries. In places like Germany and Canada, financial literacy is part of the national education system, ensuring that all students learn the same important concepts [19] [21]. For instance, in Canada, the Canadian Financial Literacy Strategy encourages collaboration between educational institutions and government agencies to create standardized financial education across schools [23]. This structured approach has led to improved financial literacy rates among Canadian youth. In Germany, financial literacy is integrated into various subjects, allowing students to apply financial concepts in real-life contexts [19]. These examples suggest that Kazakhstan could benefit from adopting similar frameworks to enhance financial education nationwide.
However, in Kazakhstan, financial literacy is often just an optional subject, meaning that not all students receive the knowledge they need [1] [4]. The existing curriculum does not provide a comprehensive or consistent approach, which limits students' financial understanding [2]. The Government of Kazakhstan recognizes this issue and is working to improve financial education from 2020 to 2024 to help its
citizens understand finances better [2]. This effort reflects a growing awareness of the importance of financial literacy in enabling young people to make better money choices.
Pedagogical and Psychological Factors.
Financial education in Western countries often includes behavioral finance elements, which are crucial for fostering responsible financial behavior and risk aversion. For example, Canadian and European programs help students avoid impulsive financial decisions, including tendencies toward gambling, by teaching financial decision-making and self-control [6] [17] [20]. In Kazakhstan, however, the absence of such psychological training leaves students more vulnerable to high-risk behaviors and impulsive spending, as well as susceptibility to financial schemes [16] [17].
Discussion.
The study highlights critical differences in financial literacy outcomes between Kazakhstan and Western countries. Western countries' financial literacy programs focus on early education, ensuring financial skills are taught alongside general education. This integration results in lower reliance on high-interest debt and improved financial resilience. Germany's financial literacy programs emphasize real-world applications in various contexts, encouraging students to make sound decisions and avoid risky financial products [17].
In Kazakhstan, where financial literacy remains underemphasized, students face a higher likelihood of taking on high-interest debt due to limited financial knowledge. Studies suggest that enhancing financial literacy can mitigate financial insecurity by reducing dependence on microloans and fostering a culture of savings and informed decision-making [8].
The psychological aspects of financial literacy programs are especially notable. Western financial education programs address psychological factors influencing financial decisions, such as impulse control and risk aversion, which help prevent debt
accumulation from high-risk choices like gambling. In Canada, integrating behavioral finance into school curricula has led to a measurable decline in risk-prone behaviors among youth [14]. These findings align with research by Zhu et al. (2019), who demonstrate that early financial education can substantially improve students' long-term financial well-being [6].
Conclusion.
This comparison shows why strong financial education is important for young people. In Western countries, there are well-developed programs that teach young people how to manage money, avoid debt, and make good financial choices. In Kazakhstan, financial education is still limited, which leaves students more at risk of debt and poor spending habits.
To improve this, Kazakhstan could learn from Western practices, like making financial education mandatory in schools. These programs could teach practical money skills and explain why people make certain spending choices. This approach could help students avoid risky financial behaviors and build good habits for the future. Future studies could look at how financial education affects people's financial health in Kazakhstan.
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