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Skilled but unaware of it: Occurrence and potential long-term effects of females' financial underconfidence

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  • Bannier, Christina E.
  • Schwarz, Milena

Abstract

We find strong gender- and education-related differences in the distribution of actual and perceived financial sophistication: Whereas financial literacy rises in formal education, confidence increases in education for men but decreases for women. We show that the financial decisions of highly-educated men benefit strongly from this excess confidence, while the underconfidence of highly-educated women, in contrast, impairs their long-term financial planning.

Suggested Citation

  • Bannier, Christina E. & Schwarz, Milena, 2017. "Skilled but unaware of it: Occurrence and potential long-term effects of females' financial underconfidence," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168188, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc17:168188
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    Cited by:

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    2. Wookjae Heo & Abed G. Rabbani & Jae Min Lee, 2021. "Mediation between financial risk tolerance and equity ownership: assessing the role of financial knowledge underconfidence," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 26(3), pages 169-180, September.
    3. 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.

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    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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