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Changes in income distribution

Changes in income distribution. Source: Fundação Getúlio Vargas (FGV). The New Middle Class: The Bright Side of the Poor (http://cps.fgv.br/en/nmc). The “ new ” middle class : 94,9 mi (50% of the population ). The case for a National Strategy.

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Changes in income distribution

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  1. Changes in incomedistribution Source: Fundação Getúlio Vargas (FGV). The New Middle Class: The Bright Side of the Poor (http://cps.fgv.br/en/nmc) The “new” middleclass: 94,9 mi (50% ofthepopulation)

  2. The case for a NationalStrategy • Changes in income distribution are likely to persist and will have impacts on each market (newcomers). • This goes beyond the role of one sole agency. • Financial Education should be included in a general effort (partnerships) to increase the financial capability of the population. • A National Strategy may provide the framework to integrate programs: sectoral (investments, credit, pensions etc.) and cross-sectoral. • Financial literacy (personal finance) in large scale: target children and young people at school. • That will not be efficiently reached by a sectoral program alone (e.g. investor education).

  3. Timeline – NationalStrategyon Financial Education • 2006: Creation of COREMEC (Supervisory and Regulatory Committee of Financial Systems, Capital Markets, Private Insurance and Social Welfare ) • 2007: COREMEC working group (coordinated by CVM) to draft a National Strategy on FE with partnerships • 2009: draft of the National Strategy • Jan/10 : launch of pilot project in schools (secondary education) • Dec/10: National Strategy approved • Apr/10: members of the National Committee for Financial Education appointed

  4. Partnerships • National Inventory of FE projects (70) • National Survey on Financial Literacy • Website: www.vidaedinheiro.gov.br • Pedagogical support group: financial + educational sector • Pilot project on schools (coordinated by CVM + Central Bank, Private Insurance Regulator and Pension Funds Regulator)

  5. National Strategy for Financial Education 6 Decree # 7.397 of 2010 CONEF Schools Other Projects (GAP) CrossectorialPrograms Association SectorialPrograms FE in Schools Other

  6. global Financial Education in Schools SpaceDimension Time Dimension Future Social Level Present Individual Level Past

  7. Space-related Goals Financial Education in SchoolsGoals • Responsible Consumption and Saving • Knowledge and tools for independent decision-making • Social awareness

  8. Time-related Goals Financial Education in SchoolsGoals 9 • Short-, mid- and long-term planning and decision-making • Prevention • Enable social mobility

  9. S01 Skills Web S10 S02 Rights and responsabilities awareness Social- and environmental -friendly financial decision making • Time-related • Space-related Overcoming financial difficulties S09 S03 Balancing financial wishes and needs Assessing prevention plans S08 S04 Understanding financial education texts Financial planning S07 S05 Critical attitude towards publicity Multiplying financial education knowledge and behaviour Independent decision making based on financial needs S06

  10. Teaching Material Student’s book  72 Learning Opportunities: formal and real-life contents + activities + self-assessment questions Teacher’s book  a copy of the student’s book + teaching guidelines + further formal contents

  11. Financial Education in Schools ImpactEvaluation in 2010

  12. Financial Education in Schools ImpactEvaluation in 2010 Resultingpilotproject 900 schools Challenge in a Federation: CHALLENGE: multipleactors • 5,560 municipalities (primaryschools) • 27 states (secondaryschoolsandprimary) • Union (universities) OPPORTUNITY: EducationalSupportGroup: • 1 representative for the 27 states • 1 represent. for themunicipalities • 1 represent. MinistryofEducation • Financial regulators • SROs + associations etc.

  13. ImpactEvaluation Survey Instruments (baseline: AUG10 / follow-up: DEC10/next: NOV11) • 1. Financial Literacy Test: designed to measure financial literacy (competences and abilities) • 2. Behavior and attitudinal questionnaires to students: • Socioeconomic information; • Financial decision-making and behavior (familiarity, use and access to financial products; savings and investments behavior); • Attitudes towards the financial world (propensity to save, consumption autonomy) • 3. Parent’s questionnaire: socioeconomic data of the student’s household, financial profile and behavior of student’s family, knowledge and access to financial products. Next Steps • Parent’s workshop (1st semester 2011): in treatment schools • Mai 9-10, International Workshop (Rio de Janeiro): preliminary results from financial education in schools project.

  14. Ceará TreatmentGroup: 24 municipalities 62 schools 2.012 students

  15. Brasília 32 schools 1.105 students

  16. Stateof Minas Gerais 6 municipalities 14 schools 360 students

  17. Rio de Janeiro 42 municipalities 134 schools 3.513 students

  18. São Paulo 14 municipalities 180 schools 5.741 students

  19. Tocantins 12 municipalities 17 schools 505 students

  20. 29 • Thank you! • National Strategy: www.vidaedinheiro.gov.br

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