Culture, preferences, and the gender gap in financial literacy

Abstract Using a nationally representative US sample of 9,623 adults from 26 countries of ancestries, we investigate the role of culture in explaining the gender gap in financial literacy. We find that (i) the smaller the gender gap in financial literacy in the country of ancestry, the higher the financial understanding of women in the US relative to men and (ii) higher patience and lower altruism in the country of ancestry are associated with greater financial literacy in the US for men but not women. Even after controlling for gender variation in these preferences, country-of-ancestry gender gap in financial literacy remains strongly associated with women’s higher financial literacy, especially for knowledge of inflation and risk diversification. This finding suggests that gender differences in financial literacy are shaped by social constructs.