Is Knowledge Enough? Financial Literacy, Marriage, and Gender Differences in Wealth

This paper studies whether financial literacy shapes gender differences in wealth. Using data from the United States and the Netherlands, we document that women have lower financial literacy and confidence than men, are less likely to manage long-term investments within their households, and hold fewer financial assets, with the largest gaps among married agents. We build a life-cycle portfolio-choice model with endogenous financial literacy accumulation and marital dynamics centered around two wedges: a higher cost of literacy investment for married women and gender-specific perceived returns on risky assets. The calibrated model qualitatively matches untargeted life-cycle patterns in literacy and portfolio choice, accounting for a third of the gender gap in individual financial assets. Counterfactual exercises show that early-life financial education can narrow the gender knowledge gap, and portfolio-allocation rules may offset confidence and marriage-related wedges that education may not undo, lowering the wealth gap by 6%.