Numeracy=Wealth: Yet another reason that maths must be taught
It continues to boggle my mind that maths is not compulsory in the HSC and my boggling was reinforced by a recent research study that directly correlates numeracy and wealth.
Yes, put bluntly the more maths you know the richer you will be.
Here is what the study, Numeracy and Wealth, found:
Numeracy is defined as the ability to understand and use numerical information. We examined the relationship between numeracy and wealth using a cross-sectional and a longitudinal study. For a sample of approximately 1000 Dutch adults, we found a statistically significant correlation between numeracy and wealth, even after controlling for differences in education, risk preferences, beliefs about future income, financial knowledge, need for cognition or seeking financial advice.
The authors conclude that “on average a one-point increase in the numeracy score (11-point scale) of the respondent is associated with 5 percent more personal wealth”. And it’s not about rich people getting a better education. Over time numerate people accumulate wealth and people with “low numeracy decumulate wealth”.
There are so many good arguments for every student who is going to become a functioning member of our modern society being taught maths. So many arguments that are more compelling than our willingness to force them to analyse Shakespeare and Patrick White in compulsory English classes. But leaving aside all the arguments about generally understanding our world, about participating in a modern technical society, about competing internationally – leaving all that to one side, this study shows there is a compelling degree of self-interest in studying maths.
Maths should be compulsory throughout high school. And even if it isn’t compulsory, people should be studying it anyway. For everyone’s good, and for their own good.
Now, you might well be thinking that the issue isn’t studying maths, it’s about financial literacy. In that context, this study from the US says you ought to think again because they found that traditional personal finance courses have no effect on financial outcomes. Instead, “we find additional mathematics training leads to greater financial market participation, investment income, and better credit management, including fewer foreclosures.” Just teach maths.