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Canadian Gender Gap in Financial Literacy: Confidence Matters

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  • Raquel Fonseca

    (ESG-Université du Québec à Montréal & CIRANO)

  • Simon Lord

    (ESG-UQAM and CREEi)

Abstract

We construct a financial literacy index as well as a financial confidence index in order to evaluate the effect of confidence on financial literacy, and more specifically, on the gender gap in financial literacy. Results confirm the existence of a gender gap in financial literacy in Canada, and show that having a higher con¬fidence in one’s financial skills and knowledge is indeed a factor that increases one’s financial literacy. Financial confidence is found not to track actual financial skills very closely across different ages, espe¬cially for women, and at older ages. We also find evidence that financial literacy and decision making are related to the relative education level of spouses. Using the Oaxaca-Blinder decomposition, confidence is also found to explain 14.15% of the gender gap in financial literacy, while being self-employed explains 19% of the gap, and taking part in the financial planning accounts for 16.76% of the gender gap difference. We find that most of the gap remains unexplained by differences in coefficients of men and women.

Suggested Citation

  • Raquel Fonseca & Simon Lord, 2020. "Canadian Gender Gap in Financial Literacy: Confidence Matters," Hacienda Pública Española / Review of Public Economics, IEF, vol. 235(4), pages 153-182, December.
    • Handle: RePEc:hpe:journl:y:2020:v:235:i:4:p:153-182
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    2. Andrzej Cwynar & Beata Świecka & Kamil Filipek & Robert Porzak, 2022. "Consumers' knowledge of cashless payments: Development, validation, and usability of a measurement scale," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(2), pages 640-665, June.
    3. Man Yao & Tori I. Rehr & Erica P. Regan, 2023. "Gender Differences in Financial Knowledge among College Students: Evidence from a Recent Multi-institutional Survey," Journal of Family and Economic Issues, Springer, vol. 44(3), pages 693-713, September.
    4. Raquel Fonseca & Marie Mélanie Fontaine & Catherine Haeck, 2021. "Le lien entre les compétences en numératie et les rendements sur le marché du travail au Québec," CIRANO Project Reports 2021rp-11, CIRANO.

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    More about this item

    Keywords

    Gender; financial literacy; financial confidence;
    All these keywords.

    JEL classification:

    • G0 - Financial Economics - - General
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • H00 - Public Economics - - General - - - General

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