Fearless Woman: Financial Literacy and Stock Market Participation

Fearless Woman: Financial Literacy and Stock Market Participation

Abstract

Women are less financially literate than men. It is unclear whether this gap reflects a lack of knowledge or, rather, a lack of confidence. Our survey experiment shows that women tend to disproportionately respond “do not know” to questions measuring financial knowledge, but when this response option is unavailable, they often choose the correct answer.

We estimate a latent class model and predict the probability that respondents truly know the correct answers. We find that about one-third of the financial literacy gender gap can be explained by women’s lower confidence levels. Both financial knowledge and confidence explain stock market participation.

Full content of the publication

Tags

Financial Decision Financial literacy Gender Gap

Authors

Annamaria Lusardi

Academic Director, Global Financial Literacy Excellence Center (GFLEC)

Rob Alessie

Tabea Bucher-Koenen

Web

Additional Information

Date published

01/03/2021

Document Type

Research

Geographies

Global

Target

General

Pages

57

JEL Code

G53, C81, D91

Source

GFLEC

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