HOW FINANCIALLY LITERATE ARE WOMEN? AN OVERVIEW AND NEW INSIGHTS

Hei-ock Kim

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.