January 2022

IZA DP No. 15054: Culture, Gender, and Financial Literacy

Using a nationally representative US sample of 9,623 adults from 27 countries of ancestries, we find that the higher the degree of gender convergence in financial knowledge in the country of ancestry, the higher the financial knowledge of women in the US relative to their male counterparts. After ruling out gender differences in cognitive and non-cognitive skills as potential mechanisms, we find that higher patience and lower altruism in the country of ancestry are associated with greater financial knowledge for men but not for women in the US. Once we remove any country-of-ancestry gender variation from these preferences, gender convergence in financial knowledge continues to be associated with women's (relative and absolute) greater financial literacy in the US, underscoring that gender differences in financial literacy are socially constructed. This relative and absolute female improvement is particularly robust for knowledge related to inflation and risk-diversification.