Young Australians are the only age group whose thinking scores are falling
Something is happening to 15- to 24-year-olds.
Recent data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey indicates a troubling trend among young Australians aged 15 to 24. Between 2012 and 2024, their cognitive ability scores, which measure working memory and processing speed, have declined significantly. In contrast, other age groups have shown no such drop in cognitive abilities.
These age-specific cognitive declines are particularly concerning because cognitive skills are linked to factors like employment, job performance, and financial well-being. Among the 15-24 age group, only one-third of respondents correctly answered all five financial literacy questions posed by the survey, a figure that is notably lower than the proportion of 25-34 year olds and those over 65 who answered similarly poorly.
The research suggests that this decline in cognitive ability could be contributing to lower financial literacy among young Australians. This age group faces a unique challenge, as they struggle not only with cognitive tasks but also with fundamental financial concepts such as how inflation affects purchasing power, the benefits of diversifying investments, and the relationship between high returns and high risk.
Experts suggest that this issue may be exacerbated by the amount of time young people spend on screens, which may be affecting their focus and attention. The findings underscore the importance of addressing financial literacy early on. Programs in schools combined with open discussions about money at home could help equip this generation with the knowledge and skills they need to navigate the financial challenges ahead.
Written by urgent.news from Phys.org's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
