Do female-headed households have poorer financial health compared to male-headed households? Evidence from China

The global trend of financialization has introduced significant risks and uncertainties, exacerbated by the outbreak of the COVID-19 pandemic, which has affected the economic and financial conditions of various groups. While existing research indicates that women generally exhibit lower levels of financial literacy and tend to have less access to financial resources compared to men, empirical research on gender disparity in financial health is still limited. This study aims to bridge this gap by analyzing gender differences in household financial health, using nationally representative household data from China and propensity score matching analyses. Contrary to prevalent beliefs, the findings reveal better financial health among female-headed households. For example, using the nearest neighbor matching, we found that female-headed households have a better balance of income and expenditure than male-headed households (β = 0.173, p < 0.001). Moreover, female-headed households are more likely to possess commercial insurance (β = 0.433, p < 0.001) and investment products than male-headed households (β = 0.082, p < 0.05). In addition, considering that women manage the day-to-day household consumption and are financial outperforming men, the implementation of household finance-related policies and programs, such as asset-building policies and Children’s Development Accounts, would be more effective if targeted toward women in households.