The Gender Investment Gap: Reasons and Consequences
49 Pages Posted: 27 Jan 2024
Date Written: January 12, 2024
Abstract
This study analyzes gender differences in money attitudes and their consequences for financial decision-making. Women, compared to men, report larger financial constraints, higher risk aversion, perceived stress in financial matters, and lower trust in financial institutions. As a result, women save and invest less consistently than men. Conditional on investing, women use fewer financial products, particularly in equity investments. We find a significant gender gap in stock market participation, with 17.6% of women and 32.3% of men investing. The motives and barriers influencing stock market participation also diverge, with men leaning towards short-term gains and the thrill of investing, while women commonly cite unfamiliarity with stocks and fear of potential losses as primary reasons for non-participation. These findings underscore the importance of tailoring financial services and educational initiatives to meet the specific needs of women.
Keywords: Gender investment gap, Risk aversion, Financial literacy, Investment behavior
JEL Classification: G11, G41, G53
Suggested Citation: Suggested Citation