Understanding the gender gap in economic literacy: Evidence from Germany

Economic literacy has extensive consequences for savings, investments, and financial well-being. Several studies report a gender difference favoring males, posing a threat to gender equality. However, evidence addressing factors underlying the gender gap is inconsistent. Using a representative sample of German high school students (N = 1,958), the authors investigate gender differences in economic literacy and potential explanatory factors. Results confirm a substantial gender gap favoring boys (0.25 SD). Regression and decomposition analyses reveal math ability and interest in economics as important drivers for the gap. Confidence and risk aversion also contribute, while most socialization variables show little relevance. Controlling for effort increases the gap, suggesting previous studies may have underestimated it. This study provides implications for policy interventions to mitigate the gender gap in economic literacy.