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Empowering Women Through Financial Awareness and Education

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Empowering Women Through Financial Awareness and Education

OECD Working Papers on Finance, Insurance and Private Pensions No. 14

OECD,

15 min read
10 take-aways
Audio & text

What's inside?

Do you know how to close the worldwide money gap between women and men?

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Editorial Rating

6

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  • Applicable

Recommendation

Economic experts Angela Hung, Joanne Yoong and Elizabeth Brown reach some disturbing conclusions: An enormous chasm separates how much women know about money compared to how much men know about it. Worldwide, the most vulnerable women – widows, the elderly and the poor – are even more at risk due to their lack of financial savvy. Gender-based disparities in “financial literacy” raise problems for entire economies, but many governments don’t regard these issues as important. Reporting for the Organisation for Economic Co-operation and Development (OECD) and its International Network on Financial Education (INFE), the authors present an array of sobering facts and trends based on their analyses of studies and surveys from dozens of countries. Hung, Yoong and Brown find that women learn about financial matters and value money differently than men. They describe the worrisome deficit in female fiscal understanding, and they propose solutions. getAbstract recommends this detailed report to economists, and to those involved in nonprofits or policy studies that benefit women.

Summary

What Is “Financial Literacy”?

The Organisation for Economic Co-operation and Development (OECD) defines financial literacy as the “combination of awareness, knowledge, skill, attitude and behavior necessary to make sound financial decisions and ultimately achieve individual financial well-being.” These skills depend on “cognitive ability,” “personality type” and “preferences”: traits that have an effect on financial confidence, fiscal learning and motivation to learn new money-handling skills. The OECD concludes that a “lack of financial literacy” can create a long-lasting, familial loop of negative consequences.

Women can improve their financial skills through training, information and guidance. Such financial education can help women better understand “financial products, concepts and risks.” It should increase a woman’s confidence in her ability to make financial decisions and choices. Policy makers should incorporate education about money into general consumer education.

Studies on financial literacy focus on five facets of a person’s financial well-being:

  1. The ability to satisfy household needs – commonly referred to as “making ends meet...

About the Authors

Angela Hung, Joanne Yoong and Elizabeth Brown are economists at the RAND Corporation, a nonprofit global-policy think tank.

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