Financial Education and Confidence: The Gender Gap in the Financial Market // ZEW Study Reveals: Women Are Less Confident in Financial Decisions than Men

ZEW Study Reveals: Women Are Less Confident in Financial Decisions than Men

The ZEW study shows that around a third of the gender difference in financial literacy can be explained by women's lower confidence in their financial knowledge.

Globally, women score lower than men in terms of financial education. However, part of the gender gap in financial literacy can be attributed to a lack of self-confidence rather than just a lack of knowledge. This is the conclusion of a new study by ZEW Mannheim, which examines the relationship between financial literacy, self-confidence and stock market participation. The study is based on data from the Dutch Household Survey, which has been asking more than 1,500 Dutch households about their finances every year since 1993, and introduces an innovative model for measuring "true" financial literacy.

"Our findings show that women's lack of confidence in their financial knowledge significantly contributes to the gender gap in financial literacy," explains Tabea Bucher-Koenen, head of ZEW's "Pensions and Sustainable Financial Markets" Unit. "Around 30 per cent of the gender gap in financial literacy can be attributed to a lack of self-confidence. Both knowledge and confidence are crucial for stock market participation."