The Gender Gap in Financial Matters
In their article, Bucher-Koenen, Lusardi, Alessie, and Rooij ask, “How Financially Literate Are Women?” and offer the answer “Not very.” Their article examines the differences between men and women when it comes to financial literacy. They looked at how competent men and women were in answering both basic and more-complex financial questions, and draw conclusions from those answers on gender differences in financial literacy. Importantly, the authors looked at the frequency with which the participants answered “Do not know” to questions. They found steep gender differences when men and women answered both basic and then more-complex questions; they also found that women were more likely to admit when they do not know an answer.
The study findings in this article are notable when it comes to understanding the gender gap since a basic lack of financial literacy can impede decisions about retirement planning, especially among older women who will likely live longer alone than will older men, either after the death of a spouse or as a single head of household. A defining aspect of this study is that the authors looked at the gender gap across three countries—Germany, the Netherlands, and the United States—to uncover deeper causes of gender differences.