What’s behind the male-female financial-literacy gap? These Academics say they’ve Found an Answer

Women possess lower financial literacy as compared to men, but they know more than they think they know. There is a chance that women will tend to respond that they “do not know” the answer to financial literacy issues as compared to men. But when forced to choose an answer, in a lot of cases than not they choose the proper one. 

A swing of surveys mainly tells that men are financially literate as compared to women based on their capability to properly answer questions that test one’s know-how of ideas like compound interest. However, financial knowledge only is about 67% of the entire financial literacy story. The remaining can be devoted to confidence. 

That is based on research findings commissioned by Rob Alessie from the University of Groningen in the Netherlands, Anna Maria Lusardi of George Washington University, Maarten Van Rooii, researchers located at the Dutch Central Bank, and Tabea Bucher-Koenen of the University of Mannheim. Financial Literacy tests practically instruct people to choose a multiple-choice response that includes “do not know”. A lot of women will select “do not know” if given the opportunity as compared to men.

But, if the option is unavailable, there is a big chance that women will select the correct answer. 

 “In other words, women have lower financial literacy than men, but they know more than they think they know,” the researchers mentioned above, stated. They surveyed almost two thousand Dutch citizens and more than half of the respondents identified as male. They were particularly selected to study respondents from the Netherlands because the central bank of the country has been regarded as one of the few that collects financial literacy data and information. These researchers could easily restudy some individuals who participated in the survey.

At the onset of the survey, respondents could choose “do not know” as an answer to the three (3) main questions that came up by Olivia and Lusardi Mitchell, a professor at the Wharton School of the University of Pennsylvania. But in the next survey, respondents will not be able to select “do not know”. It is at this time that one-third of the financial literacy gap can be attributed to lower levels of confidence among women. 

Finally, another cultural reason as regards the gender gap between men’s and women’s expertise in finance are male-dominated engineering courses and computer science courses. It is a known fact that tech company offices can be a hostile location for women to work and mind you, there are few opportunities for women to advance. Other reasons are a too-tiny pipeline of women eyeing pursuing careers in Science, Technology, Engineering, and Math (“STEM”). Whether you attribute the lack of women going for STEM or bias against their doing so, both of these problems originated in cultural quandaries in terms of the ability and interest of women in these fields. 

Earlier research accumulates to growing pieces of evidence that these stereotypes are not based in reality. In its entirety, women practically outperformed men on a nationwide average assessment of technology and engineering fields for the last five (5) years by the National Assessment of Educational Progress (“NAEP”).

Girls may be beaming with societal messages during their early years that they are not for STEM fields amidst their excellent skills. Even women who pursue an inkling in the field of biology or engineering can experience discrimination. Based on studies, 100% of working women of color in the field of STEM report having experienced bias throughout their careers. Some of them are mistaken for being a helper or janitor based on a survey eight (8) years from the Hasting Center for Work-Life Balance. 


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