What is the gender financial literacy gap?

Girls are less financially educated than boys. It's a phenomenon that can be observed across the globe.

Why are women less financially literate?

Several American studies provide explanations: parents discuss money differently with girls than with boys. They teach girls to save, and boys to accumulate wealth. They talk about credit and creditworthiness with 61 percent of boys as early as elementary level, but only with 43 percent of girls. In addition, fathers are more likely to talk more about money with boys, and mothers are more likely to talk about money with girls. Fathers do so with more entrepreneurial and positive enthusiasm, portraying money as a tool that can make dreams come true. Whereas girls are more likely to be urged to be frugal in an anti-pleasure and boring way. Boys thus start life with more financial self-assurance. This is important because monetary behaviors are formed as early as five years of age.

There is a lack of self-confidence

In addition, society underestimates women and so do they themselves. And they do so as early as age six. From then on, girls have less confidence in their own ingenuity than boys. This is well illustrated by a famous experiment conducted by Princeton University. Children had to link photos to a tale about a very, very clever person. For the most part, younger children chose a likeness of their own gender. However, from the age of six, all children chose mostly male photos. In our society, brilliance and genius are assigned to men.

Women know more about finances than they think

Women are less confident about finances. If women can tick the "I don't know" answer to financial questions, they do it much more often than men. In standard financial questionnaires, when given the option, women mark 55 % of the answers with "I don't know". Men only do so about 30 % of the time. This translates into a gap of 28 percentage points. Yet if the option is missing, female participants tick off considerably more correct answers. And the gap shrinks to 9 percentage points. This is shown by a major Dutch study. The researchers were thus able to show that the financial literacy gap can be explained to a significant extent by a lack of self-confidence - in fact, one third of it. Only the remainder is due to a lack in financial literacy.

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