Comparing financial literacy among women with men provides context useful in tailoring financial literacy initiatives to the particular needs of women. As expected, personal finance knowledge tends to be lower among women than among men. On average, men correctly answered 56% of the P-Fin Index questions (Figure 17). Sixty percent of men correctly answered over one-half of the index questions, with 27% answering over 75% correctly. In contrast, 21% of women demonstrated a relatively low level of financial literacy, i.e., they correctly answered 25% or less of the index questions, compared with 15% of men.
Financial literacy and wellness among U.S. women: The gender gap
Source: TIAA Institute-GFLEC Personal Finance Index (2020).
This gender gap in financial literacy continues to hold in terms of functional knowledge. Women’s financial literacy lags that of men in each functional area (Figure 18). The differential is particularly large in the realm of investing—13 percentage points.Except for consuming, all gender differentials in functional knowledge are statistically significant.
Source: TIAA Institute-GFLEC Personal Finance Index (2020).
It is useful to note an important finding in the data. The financial literacy questions in the P-Fin Index survey are multiple choice, including the option “I don’t know.” Women answered with “don’t know” to 25% of the index questions, on average. By comparison, men answered with “don’t know” to 20% of the index questions. In addition, women more often choose the “don’t know” response compared to men across every functional area except for consuming (Figure 19). This finding has also been reported in other surveys and can be interpreted as evidence of lack of confidence in addition to lack of knowledge.12
Source: TIAA Institute-GFLEC Personal Finance Index (2020).
12 See Lusardi and Mitchell (2014).