Gender- and education-related effects of financial literacy and confidence on financial wealth

•We study the effects of actual and perceived financial knowledge on wealth.•We show that greater financial literacy causes higher wealth.•Higher education strengthens this effect considerably for women, but not for men.•Men’s wealth also rises in confidence, but there is hardly any confidence effec...

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Bibliographic Details
Published in:Journal of economic psychology 2018-08, Vol.67, p.66-86
Main Authors: Bannier, Christina E., Schwarz, Milena
Format: Article
Language:English
Subjects:
Confidence
Education
Financial literacy
Gender
Household finance
Wealth
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Summary:•We study the effects of actual and perceived financial knowledge on wealth.•We show that greater financial literacy causes higher wealth.•Higher education strengthens this effect considerably for women, but not for men.•Men’s wealth also rises in confidence, but there is hardly any confidence effect for women. This study examines the influence of actual and perceived financial knowledge (i.e., financial literacy and confidence) on financial wealth. We show that consideration of gender and education as moderators helps to uncover intricate effects. Greater financial literacy leads to higher wealth, with higher education strengthening this effect considerably for women, but not so for men. Men’s wealth also rises in confidence, while there is hardly any confidence effect for women. Our results are robust against the employment of different instrumental variables and confidence measures, consideration of one-time wealth effects and mode of financial decision making.
ISSN:0167-4870
1872-7719
DOI:10.1016/j.joep.2018.05.005