The reason why females continue to have lower financial literacy scores than their male counterparts is a “persistent puzzle”, according to a Perth academic.
The University of Western Australia finance lecturer Paul Gerrans has surveyed students undertaking a personal finance elective unit at UWA and Macquarie University for the past five years to learn about the levels of financial knowledge in young people.
A total of 1200 students, from both the classes and a control group, were tested before and after the semester to measure their financial literacy and the results were published earlier this year.
The survey included questions on the ability of students to make financial decisions, investment and superannuation knowledge, maths ability and the student’s intention to budget, set financial goals, track spending and save emergency funds.
The study found on average females answered 1.5 more questions incorrectly on a 13 item scale than their male peers.
Professor Gerrans said the gender disparities were seen in both subjective and objective measures.
“To some extent the size of the gap reduces if you can control for things like numeracy and if you can control for other circumstances like how people grew up but it doesn’t get rid of it totally,” he said.
Researchers from Western Sydney University and Deakin University conducted a similar pilot study at the beginning of the year.
They found women aged 19-35 were confident in saving and budgeting in the short term but had little knowledge of long-term finances.
The study reported 91 per cent of 175 respondents were confident in their ability to save and 89 per cent said they were confident in budgeting. Only 38 per cent said superannuation was extremely relevant to them and 23 per cent showed interest in long-term investment.
Western Sydney University graduate research school dean and study co-author James Arvanitakis said the participants were asked why they thought there was a difference in financial knowledge in males and females.
“The evidence indicates women, from quite a young age, are actually dissuaded from undertaking or learning about financial literacy,” he said.
“This could be because of intergenerational biases in their family situation. It could be because the father takes care of the finances or a couple of them mentioned that at school they were discouraged from learning about finance.”
Professor Arvanitakis said this was an urgent issue which needed to be fixed.
“Financial Literacy Australia and the Commonwealth Bank and ASIC and all those organisations have really good information on their websites but it is rarely accessed,” he said.
“The next phase of our project is to try understand how we encourage young women to access this and how we encourage more engagement in their financial futures in those short, medium and longer term increments.”
Perth woman Anna Ross, 23, said in her experience males were encouraged to learn about finance more than females.
“I think it must be because somehow, at some point, we are told women should be in caring roles and men should be in money making roles because it is just too much of a difference to not be a social thing,” she said.
“I think men get the discussion a bit more with family and friends so probably a lot more boys my age do know more about finances than girls my age because of that and the way we were brought up.”
The Australian Security and Investments Commission is seeking feedback on its National Financial Literacy Strategy consultation paper before Friday, November 17.