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Understanding the Global Gender Gap in Financial Literacy: Insights and Implications

Explore the significance of the gender gap in financial literacy, its prevalence, unique challenges faced by women, consequences, and disparities across income levels. Learn about correlations with financial fragility, risk literacy, and age-related trends in literacy levels. This research, based on the S&P Global FinLit Survey and Allianz reports, sheds light on the need for bridging the gender gap in financial knowledge worldwide.

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Understanding the Global Gender Gap in Financial Literacy: Insights and Implications

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  1. The Gender Gap in Financial Literacy 5th IFFM Annual Meeting October 6th, 2017 Dr. Annamaria Lusardi The George Washington School of Business Director, Global Financial Literacy Excellence Center (GFLEC)

  2. Significance and prevalence of the gender gap • Unique challenges relative to men • Longer life expectancies • Lower lifetime income • Career interruptions due to child rearing • Lower financial skills, combined with fewer available resources • Consequences • Greater need to plan for old age • Different savings needs • Financial security during retirement placed at higher risk • With data from the 2014 Standard & Poor’s Ratings Services Global Financial Literacy Survey (S&P Global FinLit Survey), we extend existing research on the gender gap to a global level

  3. Gender gap in financial literacy around the world In most economies around the world, men have a better understanding of basic financial concepts than women Source: S&P Global FinLit Survey

  4. Worldwide financial literacy gender gap • Results from the S&P Global FinLitSurvey: • Lower financial literacy rates among women for the great majority of countries • Worldwide, 35% of men are financially literate, compared with 30% of women • Gender gap is found in both advanced economies as well as emerging economies • The gap is, on average, around 5% across the BRICS nations, and 8% for the G7 countries. • % of adults who are financially literate

  5. Gender gap in financial literacy for the G20 countries Difference in the percentage of men and women with at least 3 out of 4 answers correct (men – women)

  6. Financial skills by gender Women are disproportionately more likely than men to respond to a question with “do not know.” Source: S&P Global FinLit Survey

  7. Gender gap distribution by country income levels The gender gap in financial literacy is large and persistent across countries, and there is no evidence that income helps explain it. Source: S&P Global FinLit Survey

  8. Gender gap in financial fragility A significantly higher percentage of women than men tend to struggle with access to emergency funds. Source: S&P Global FinLit Survey

  9. Correlation between financial literacy and coping with emergency expenses Incidence of financial fragility in negatively correlated with financial literacy rates Source: S&P Global FinLit Survey

  10. Financial and risk literacy in Europe – Allianz • Evaluates literacy levels based on answers to questions about – • Financial literacy • Compound interest • Inflation • Diversification • Risk literacy • Expected return • Risk and return

  11. Gender gap across financial and risk literacy Women still lag behind men in financial literacy, particularly risk related questions 14% Basic Financial Literacy

  12. Gender gap by age group and literacy questions • Two explanations are provided for a rising gap over age • Younger generations are becoming more aware of financial literacy and closing the gap. • Gap increases with age as skills and competencies of men and women develop at different paces. Source: Allianz, International Pensions 2017

  13. Thank you! • Questions? Contact us at gflec@gwu.edu

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