Women and financial literacy

June 2013

Women and financial literacy

OECD/INFE EvIDENCE, survEy aND pOlICy rEspONsEs

WOMEN AND FINANCIAL LITERACY: OECD/INFE EVIDENCE, SURVEY AND POLICY RESPONSES

FOREWORD

Governments' attention is increasing around the world on the critical need to empower consumers through financial education. As governments launch new initiatives and national strategies to improve their population's financial skills, demand has grown for research to identify population subgroups with specific financial education needs, and to develop initiatives and tools to improve their financial wellbeing.

To address these demands, the OECD launched its financial education project in 2002, developing policy analysis and recommendations on principles and good practices for financial education and awareness with a focus on specific sectors such as credit, insurance and private pensions.

Building on this experience, the OECD established in 2008 the International Network on Financial Education (INFE) which facilitates information sharing, research and the development of policy instruments and analytical tools. More than 240 public institutions from 107 countries are members of the INFE and collaborate in the development of data, comparative analysis and global policy instruments in a consistent and systematic way.

Under the support of the Russia/WB/OECD Trust Fund for Financial Literacy and Education, the OECD has led the development and worldwide dissemination of the following three main types of products and tools:

Broad and detailed reviews and inventories of effective financial education activities and policies worldwide, thanks to the wide membership and involvement of the OECD/INFE.

Policy, analytical and comparative reports and research highlighting good practices and detailed case studies on financial education and literacy across member countries.

Criteria, standards, principles and guidelines as well as practical tools to facilitate and improve strategic financial education efforts.

This book addresses the financial education needs of women and girls by collecting evidence of gender differences in financial literacy and by discussing the factors related with such gender differences. The book also reviews policy responses and initiatives to tackle women's and girl's needs and draws suggestions from existing initiatives.

Based on this analysis, the OECD/INFE has developed Policy Guidance on Addressing Women's and Girls' Needs for Financial Awareness and Education, which is published separately as an OECD product under the Russia/WB/OECD Trust Fund for financial literacy and education. Both the analysis contained in this publication and the related policy guidance will feed into the Russia's G20 Presidency agenda.

3

TABLE OF CONTENTS

EXECUTIVE SUMMARY..................................................................................................................................... 7

CHAPTER 1: EMPOWERING WOMEN THROUGH FINANCIAL AWARENESS AND EDUCATION .................... 9

Introduction ............................................................................................................................................... 11 Background and Context ........................................................................................................................ 11 Definitions and Conceptual Framework................................................................................................. 11 The importance of gender in the context of financial literacy and education....................................... 12

1. What is known about gender effects in financial literacy and education?......................................... 15 Are there Gender Differences in Financial Literacy across Countries? .................................................. 15 Nationally-Representative Household Surveys .................................................................................. 15 Other Household Surveys ................................................................................................................... 21 INFE Member Survey .......................................................................................................................... 21 How do gender differences affect specific subgroups? ......................................................................... 24 Evidence from the literature .............................................................................................................. 24 INFE Member Survey .......................................................................................................................... 27

2. What factors may drive gender differences?...................................................................................... 27 Evidence from the literature .................................................................................................................. 27 INFE Member Survey.............................................................................................................................. 29

3. Financial education programmes aimed at addressing women's needs ............................................ 30 Review of literature and programmes ................................................................................................... 30 INFE Member survey .............................................................................................................................. 32

Conclusions and Next Steps ....................................................................................................................... 33

APPENDIX: AUGMENTING LITERATURE SEARCH METHODOLOGY................................................................ 35

Search Strategy....................................................................................................................................... 35 Results .................................................................................................................................................... 36

REFERENCES .................................................................................................................................................. 38

CHAPTER 2: GENDER DIFFERENCES IN FINANCIAL LITERACY: IDENTIFYING BARRIERS AND ADDRESSING WOMEN'S' AND GIRLS' NEEDS THROUGH FINANCIAL EDUCATION....................................................... 47

Introduction ............................................................................................................................................... 49 Background............................................................................................................................................. 49 Process ................................................................................................................................................... 49 Scope of the report ................................................................................................................................ 50

1. Gender differences in financial literacy.............................................................................................. 50 Women have lower levels of financial knowledge................................................................................. 50 Gender differences in financial knowledge at young ages................................................................. 52 Smaller but still significant gender differences after controlling for socio-demographic factors...... 53 Less well-educated and poor women have the lowest financial knowledge ..................................... 54 Different financial attitudes across genders .......................................................................................... 55 Women appear to be aware of their lack of financial knowledge ..................................................... 55

5

Women have lower confidence than men in their financial knowledge and skills ............................ 56 Men are more likely to be over-confident in their financial skills...................................................... 57 Gender differences in interest for financial matters .......................................................................... 57 Women are more risk-averse than men............................................................................................. 58 Implications for women's financial behaviour ................................................................................... 59 Gender differences in financial behaviour and strategies ..................................................................... 59 Women are more likely to have a budget and to keep track of their finances.................................. 59 Making ends meet: women tend to cut down on spending while men try to earn extra money ..... 62 Gender differences in product holding............................................................................................... 65 Gender differences in saving behaviour............................................................................................. 67 Women are less likely to choose financial products appropriately.................................................... 72 More research is needed to better understand gender differences in financial literacy ...................... 75 2. Barriers to women's financial empowerment and Factors affecting gender differences in financial literacy................................................................................................................................................. 76 Gender roles in household financial decision making have limited impact........................................... 77 Gender differences in socio-economic conditions: lower access to education and employment ........ 78 Gender difference in access to entrepreneurship and to finance ......................................................... 80 Women's lower financial inclusion ........................................................................................................ 81 Different social and legal treatment of men and women...................................................................... 83 Ongoing research efforts and policy action are needed to address the factors affecting gender differences in financial well-being ......................................................................................................... 85 3. Addressing women's financial education needs through policies and dedicated programmes ........ 86 A. Financial education policy initiatives: priorities and target groups ................................................. 86 Addressing the needs of specific subgroups of women ..................................................................... 87 Improving women's financial strategies............................................................................................. 90 B. Impact and effectiveness of financial education initiatives ............................................................. 94 Financial knowledge and attitudes ..................................................................................................... 94 Financial behaviour............................................................................................................................. 95 4. Challenges and lessons learnt............................................................................................................. 96 Concluding remarks ................................................................................................................................. 100 REFERENCES ................................................................................................................................................ 104 APPENDIX: TABLES....................................................................................................................................... 115 LIST OF ACRONYMS ..................................................................................................................................... 127

6

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download