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Financial Literacy and Intra-household Decision Making: Evidence from Rwanda
[Women, land and empowerment in Rwanda]

Author

Listed:
  • Antonia Grohmann
  • Annekathrin Schoofs

Abstract

Research has consistently shown that women’s involvement in household decision making positively affects household outcomes such as nutrition and education of children. Is financial literacy a determinant for women to participate in intra-household decision making? Using data on savings groups in Rwanda, we examine this relationship and show that women with higher financial literacy are more involved in financial and expenditure decisions. Instrumental variable estimations suggest a causal link. For this reason, we perform a decomposition analysis breaking down the gender gap in financial literacy into differences based on observed socio-demographic and psychological characteristics and differences in returns on these characteristics. Our results show high explanatory power by education, happiness, symptoms of depression and openness but also suggest that a substantial fraction can be explained by differences in returns. We argue that this results from a strong role of society and culture.

Suggested Citation

  • Antonia Grohmann & Annekathrin Schoofs, 2021. "Financial Literacy and Intra-household Decision Making: Evidence from Rwanda [Women, land and empowerment in Rwanda]," Journal of African Economies, Centre for the Study of African Economies, vol. 30(3), pages 225-250.
    • Handle: RePEc:oup:jafrec:v:30:y:2021:i:3:p:225-250.
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    File URL: http://hdl.handle.net/10.1093/jae/ejaa007
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    Citations

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    Cited by:

    1. Ceyla Antonio-Anderson & Elena Fuentes & Maricela Carolina Peña Cárdenas, 2024. "Incidencia de los factores socioeconómicos en la alfabetización financiera," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 19(1), pages 1-25, Enero - M.
    2. 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.
    3. Steve Agnew & Valerie A. Sotardi, 2024. "The Impact of Pocket Money and Term Time Employment on the Financial Confidence of Adolescents in New Zealand," Working Papers in Economics 24/10, University of Canterbury, Department of Economics and Finance.

    More about this item

    Keywords

    financial literacy; women empowerment; intra-household decision making; JEL classification: D14; J16; G02;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles

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