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Understanding the Gender Gap in Financial Literacy: Evidence from Australia

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  • Alison C. Preston
  • Robert E. Wright

Abstract

Using micro‐data from the Household, Income and Labour Dynamics in Australia Survey, and the Oaxaca–Blinder decomposition technique, this paper examines the determinants of the gender gap in financial literacy. The analysis suggests that human capital variables, such as age and education, are not important in explaining the gender gap in financial literacy. Labour market variables, such as sector, occupation, industry, union membership and labour market status, are important and explain around 16 per cent of the gap. This finding is dependent on the assumption that these variables are exogenous. There is a large unexplained gap, suggesting that the main determinants are neither human capital nor labour market factors.

Suggested Citation

  • Alison C. Preston & Robert E. Wright, 2019. "Understanding the Gender Gap in Financial Literacy: Evidence from Australia," The Economic Record, The Economic Society of Australia, vol. 95(S1), pages 1-29, June.
    • Handle: RePEc:bla:ecorec:v:95:y:2019:i:s1:p:1-29
    DOI: 10.1111/1475-4932.12472
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    Cited by:

    1. Preston, Alison & Qiu, Lili & Wright, Robert E., 2022. "A Study of the Chinese Gender Gap in Financial Literacy," IZA Discussion Papers 15253, Institute of Labor Economics (IZA).
    2. Raquel Fonseca & Simon Lord, 2020. "Canadian Gender Gap in Financial Literacy: Confidence Matters," Hacienda Pública Española / Review of Public Economics, IEF, vol. 235(4), pages 153-182, December.
    3. Justus Blaschke, 2022. "Gender differences in financial literacy among teenagers - Can confidence bridge the gap?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2144328-214, December.
    4. Zhou, Yang & Yang, Manfang & Gan, Xu, 2023. "Education and financial literacy: Evidence from compulsory schooling law in China," The Quarterly Review of Economics and Finance, Elsevier, vol. 89(C), pages 335-346.
    5. Rohan Best & Noura Saba, 2021. "Quantifying Australia’s Gender Superannuation Gap," The Economic Record, The Economic Society of Australia, vol. 97(318), pages 410-423, September.
    6. Man Yao & Tori I. Rehr & Erica P. Regan, 2023. "Gender Differences in Financial Knowledge among College Students: Evidence from a Recent Multi-institutional Survey," Journal of Family and Economic Issues, Springer, vol. 44(3), pages 693-713, September.
    7. Rink, Ute & Walle, Yabibal M. & Klasen, Stephan, 2021. "The financial literacy gender gap and the role of culture," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 117-134.
    8. Paul Gerrans & Anthony Asher & Joanne Kaa Earl, 2022. "Cognitive functioning, financial literacy, and judgment in older age," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(S1), pages 1637-1674, April.
    9. Azra Zaimovic & Anes Torlakovic & Almira Arnaut-Berilo & Tarik Zaimovic & Lejla Dedovic & Minela Nuhic Meskovic, 2023. "Mapping Financial Literacy: A Systematic Literature Review of Determinants and Recent Trends," Sustainability, MDPI, vol. 15(12), pages 1-30, June.
    10. Alison Preston & Robert E. Wright, 2023. "Gender, Financial Literacy and Pension Savings," The Economic Record, The Economic Society of Australia, vol. 99(324), pages 58-83, March.
    11. Elizabeth Ooi, 2020. "Give mind to the gap: Measuring gender differences in financial knowledge," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(3), pages 931-950, September.
    12. Steffen Westermann & Scott J. Niblock & Jennifer L. Harrison & Michael A. Kortt, 2020. "Financial Advice Seeking: A Review of the Barriers and Benefits," Economic Papers, The Economic Society of Australia, vol. 39(4), pages 367-388, December.
    13. Elisa Birch & Alison Preston, 2021. "Women, COVID-19 and Superannuation," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 24(2), pages 175-198.
    14. Jennifer Robson & Johanna Peetz, 2020. "Gender differences in financial knowledge, attitudes, and behaviors: Accounting for socioeconomic disparities and psychological traits," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(3), pages 813-835, September.
    15. Abhishek Sharma & Chandana Hewege & Chamila Perera, 2022. "Violations of CSR Practices in the Australian Financial Industry: How Is the Decision-Making Power of Australian Women Implicated?," Sustainability, MDPI, vol. 15(1), pages 1-21, December.

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