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Gender, Financial Literacy and Pension Savings

Author

Listed:
  • Preston, Alison

    (University of Western Australia)

  • Wright, Robert E.

    (University of Glasgow)

Abstract

Using micro-data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey this paper examines the relationship between the gender gap in financial literacy and the gender gap in pension savings amongst non-retired adults aged 18-64 in 2018. A simple theoretical model is presented. It implies two empirical specifications: a reduced-form specification where the focus is on pension savings and a more structural specification where the focus is on the "pension return" (the ratio of pension savings to cumulative earnings). Oaxaca-Blinder decomposition analysis suggests that around 8.5 per cent of the gender gap in pension savings may be attributed to the gender gap in financial literacy. This finding holds even in the presence of controls for financial risk tolerance. Policy implications and directions for future research are discussed in the paper.

Suggested Citation

  • Preston, Alison & Wright, Robert E., 2022. "Gender, Financial Literacy and Pension Savings," IZA Discussion Papers 15250, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp15250
    as

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    References listed on IDEAS

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    3. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66(4), pages 281-281.
    4. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Alison Preston, 2022. "Financial fragility, financial literacy and the early withdrawal of retirement savings during COVID-19," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 25(2), pages 127-147.
    2. 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.

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    More about this item

    Keywords

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    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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