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Canadian Gender Gap in Financial Literacy: Confidence Matters

Raquel Fonseca () and Simon Lord
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Simon Lord: ESG-UQAM and CREEi

Hacienda Pública Española / Review of Public Economics, 2020, vol. 235, issue 4, 153-182

Abstract: We construct a financial literacy index as well as a financial confidence index in order to evaluate the effect of confidence on financial literacy, and more specifically, on the gender gap in financial literacy. Results confirm the existence of a gender gap in financial literacy in Canada, and show that having a higher con¬fidence in one’s financial skills and knowledge is indeed a factor that increases one’s financial literacy. Financial confidence is found not to track actual financial skills very closely across different ages, espe¬cially for women, and at older ages. We also find evidence that financial literacy and decision making are related to the relative education level of spouses. Using the Oaxaca-Blinder decomposition, confidence is also found to explain 14.15% of the gender gap in financial literacy, while being self-employed explains 19% of the gap, and taking part in the financial planning accounts for 16.76% of the gender gap difference. We find that most of the gap remains unexplained by differences in coefficients of men and women.

Keywords: Gender; financial literacy; financial confidence (search for similar items in EconPapers)
JEL-codes: G0 H00 I22 (search for similar items in EconPapers)
Date: 2020
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Working Paper: Canadian Gender Gap in Financial Literacy: Confidence Matters (2019) Downloads
Working Paper: Canadian Gender Gap in Financial Literacy: Confidence Matters (2019) Downloads
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