Financial literacy: what does the gender gap stem from?

In 2023, the Bank of Italy conducted a survey on the level of financial culture of the Italian population, as part of an international initiative promoted by the OECD.

Like the previous initiatives of 2017 and 2020, the survey assesses financial literacy by looking at three main components: financial knowledge, financial behaviour and financial attitudes?. 

According to the OECD report published on December 2023, 39 countries took part in the survey, 19 of which are European Union members. Unfortunately, Italy ranks among the lowest in the financial literacy rankings, where its average score is 10.6 out of 20. There is a slight improvement in comparison to the 2020 survey, driven by the financial behaviour and financial attitude components.

In many countries around the world, women are less financially knowledgeable, and Italy is no exception. This gender divide is also observed in a total of 11 European countries, most noticeably Spain, Portugal and Greece.

As in most OECD countries, in Italy, the gender gap is biggest in the financial knowledge component. With reference to financial behaviour, the gap is negligible, whereas the gap in financial attitudes – the component that is most informed by people's long-term view – is reversed in favour of women.

Among Italian women, the gender divide is wider for those with a lower level of education and for female students and even wider for housewives and pensioners. Across Italy, the divide increases in the southern part of Italy.

The low level of female financial literacy is partly due to the Italian labour market dynamics: women's employment rate is low, especially in Southern Italy, and the number of those who do not even look for a job is increasing. If only working women were considered, whether self-employed or employees, their financial literacy would be in line with that of men.

The survey shows no gender differences in the ownership of bank accounts or payment cards (debit or credit cards, prepaid cards); instead, the gap is evident when it comes to active participation in the financial markets. Women, including working women, hold a smaller number of assets (such as bonds, stocks or investment funds shares) than men.

This kind of divide may be influenced by several factors: women's stronger risk aversion, women's lower confidence in their own financial skills and their lower income in comparison to that of men.

Wage inequality is a key factor. Women's hourly wages are, on average, lower than men's: the gap in the private sector was about 11 per cent in 2021, even though it has decreased over the last three decades.

Wage inequalities influence wealth accumulation, thus feeding into increasing the gender gap in economic resilience, i.e. the amount of resources available to draw on in the event of income shocks or other crises.

For the first time, the OECD survey has analysed the level of digital financial literacy and shows that Italian scores are lower than the European average in this area as well; besides, there is also evidence here of a gender gap that mainly affects women who do not participate in the job market.

The data suggest that in order to reduce gender divides and increase financial literacy and well-being, we should move in two different directions: on the one hand, labour market policies should support female participation and reduce wage inequalities; on the other hand, financial literacy policies should engage more women and stimulate their active participation in the economic field.

Banca d'Italia is at the forefront with its Le donne contano ('women matter') project, both online and in the field, also thanks to partnerships with several associations.