Page 184 - Powerful Social Studies for Elementary Students 4th Edition

156 Powerful Social Studies for Elementary Students
know that money is printed by the government but not realize that the amounts of money in circulation are carefully regulated; they may know that banks are places to keep money safe but not know anything about other banking operations; or they may think that the value of an item depends only on the resources that go into producing it. In addition, certain misconceptions are common: The price of an item depends on its size, property is owned by those who use it, or the value of money depends on its color, picture, size, or serial number (Schug & Hartoonian, 1996).
Berti (2002) identified the following trajectories in children’s knowledge about eco- nomics. Preschoolers typically show no understanding of economic institutions, and they do not understand the value of money or how it is used in buying and selling. If offered coins, they may prefer larger, more familiar, or more attractive coins to more valuable ones. They are aware that their parents make money by working, but they also think that money is available on request from banks and obtained as change from shop- keepers. In the early primary years (ages 6 to 8), they develop initial comprehension of the value and function of money and begin to represent banks as places where people deposit their money to protect it from thieves (rather than as sources of money).
Older children (ages 8 to 10) mention several sources of money that owners can use to pay their employees, such as earning it through their own jobs, getting it from banks, getting it from the government, or even getting it from the employees themselves (who must pay in order to be hired). Knowledge about shop profits and banking operations (e.g., deposits, loans, interest, and their relationships) usually is not acquired until at least ages 9 or 10, although it can be taught earlier (Berti & Monaci, 1998). Until then, children do not realize that employees are paid with money acquired from the sale of goods or services produced by their work, and that retail prices must be higher than wholesale prices to enable shopkeepers to make a living. Most children do not know about bank interest, and even if they do, they usually do not understand how banks make a profit through the difference between deposit interest and loan interest.
Studies of children as consumers indicate that they are often brand conscious but seldom price conscious when asked to represent shopping or purchases (John, 1999; McNeal, 1992), even though probing may reveal that they know the approximate cost of the items (Pliner, Freedman, Abramovitch, & Darke, 1996). As they progress through the early grades they gradually become more knowledgeable about the value of money and sophisticated about managing it. These developments emerge sooner among children who are high achievers in mathematics or who have had direct economic experiences (e.g., receiving an allowance, saving for a purchase, having their own bank account) (Abramovitch, Freedman, & Pliner, 1991; Sonuga-Barke & Webley, 1993).
Our own research (Brophy & Alleman, 2005) revealed many of these same findings and generated some new ones. We found that K–3 students often were vague about the difference between renting or buying housing, or they described the difference in terms of planning to live in the home for a short time versus a long time rather than in terms of acquiring ownership of the home. Despite some intuitive understanding of the limita- tions of bartering systems, they could not explain that money systems were invented because purchasing with money is easier and more convenient than trading. They were vague about where money comes from (i.e., that it is made by the government). Many described banks simply as places where people put extra money for safekeeping (i.e., each person’s money is kept in a separate box), or as places to go to get money (simply by asking for it). Some mentioned using banks to pay bills or cash checks, but none said anything about checking accounts, loans, or other financial services. Most knew that checks are used to receive or transmit money, but only a minority knew that the money specified on checks that people write is debited from their bank accounts. Similarly, most children knew about when and where credit cards would be used, but
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