Financial Decision-Making Dynamics Among Women and Financial Health in Kenya: Propensity Score Matching

Women empowerment and participation in decision-making is essential for promoting socioeconomic development and gender equality. While concerted efforts have been made to reduce gender inequality and promote women empowerment, women still lag behind men in key decision making. This paper analyzes how financial literacy and other factors influence financial decision making among women, and whether women’s participation in financial decision-making improves household financial health. The empirical analysis was conducted using propensity score matching using data from the Financial Access (FinAccess) survey 2021. The results show that a financially literate woman, or a rural woman was more likely to make key financial decisions jointly with spouse compared to a counterpart who was either financially illiterate or an urban resident. The results also indicate that a woman that made key financial decisions jointly with spouse was significantly more likely to be financially healthy compared to a counterpart that did not. The results suggest that access to financial education empower women to effectively participate in (joint) decision-making on financial related matters, which ultimately improves household’s welfare.