How Financially Literate Are Women? An Overview and New Insights

Global Financial Literacy Excellence Center Working Paper No. 2014-5

35 Pages Posted: 27 Mar 2015

See all articles by Tabea Bucher-Koenen

Tabea Bucher-Koenen

ZEW – Leibniz Centre for European Economic Research; Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)

Annamaria Lusardi

George Washington University - Department of Accountancy; National Bureau of Economic Research (NBER)

Rob J. M. Alessie

University of Groningen; Netspar; Tilburg University - Center for Economic Research (CentER)

Maarten van Rooij

De Nederlandsche Bank; Netspar

Multiple version iconThere are 2 versions of this paper

Date Written: December 15, 2014

Abstract

We document strikingly similar gender differences in financial literacy across countries. When asked to answer questions that measure knowledge of basic financial concepts, women are less likely than men to answer correctly and more likely to indicate that they do not know the answer. In addition, women give themselves lower scores on financial literacy self-assessments than men. Both young and old women show low levels of financial literacy. Moreover, women for whom financial knowledge is likely to be very important — for example widows or single women — know little about concepts relevant for day-to-day financial decisions. Even women in favorable economic conditions are less financially knowledgeable than men. This is important because financial literacy has been linked to economic behavior, including retirement planning and wealth accumulation. Women live longer than men and are likely to spend time in widowhood. As a result, improving women’s financial literacy is key to helping them prepare for retirement and promoting their financial security.

Keywords: Financial decision making, gender differences, financial literacy, financial sophistication, retirement planning

JEL Classification: D91, G11, D80

Suggested Citation

Bucher-Koenen, Tabea and Lusardi, Annamaria and Alessie, Rob J. M. and van Rooij, Maarten, How Financially Literate Are Women? An Overview and New Insights (December 15, 2014). Global Financial Literacy Excellence Center Working Paper No. 2014-5. Available at SSRN: https://ssrn.com/abstract=2585187 or http://dx.doi.org/10.2139/ssrn.2585187

Tabea Bucher-Koenen

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA) ( email )

Amalienstrasse 33
Munich, 80799
Germany

HOME PAGE: http://mea.mpisoc.mpg.de/

Annamaria Lusardi (Contact Author)

George Washington University - Department of Accountancy ( email )

George Washington University School of Business
Washington, DC 20052
United States

HOME PAGE: http://business.gwu.edu/profiles/annamaria-lusardi/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Rob J. M. Alessie

University of Groningen ( email )

P.O. box 800
9700 AV Groningen
Netherlands
050-3637240 (Phone)

HOME PAGE: http://members.chello.nl/~r.j.m.alessie

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

HOME PAGE: http://www.netspar.nl

Tilburg University - Center for Economic Research (CentER)

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Maarten van Rooij

De Nederlandsche Bank ( email )

P.O. Box 98
Amsterdam, 1000 AB
Netherlands

HOME PAGE: http://www.dnb.nl/en/onderzoek-2/onderzoekers/overzicht-persoonlijke-paginas/dnb150127.jsp

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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