GENDER GAP IN DEBT LITERACY: A CROSS-NATIONAL STUDY OF UNIVERSITY STUDENTS

Compared to men, women are at a disadvantage in terms of financial literacy, as shown by many studies. Women have been found less likely to respond correctly to financial test questions and more likely to select 'Don't know' option as compared to men in many national surveys, although causes of the phenomenon are still not fully explained. The main goal of this article is to check whether the gender differential exists among university students based on a new dataset derived from five European countries (self-administered survey, 1,022 respondents). To pursue this goal, we asked a series of questions: (1) Does the way in which financial literacy scores are determined matter for the gender gap measurement outcomes? (ii) Can the gap be explained by the presumably higher inclination of males to guess or greater tendency of males - as compared to females - to overestimate their capabilities? (iii) If the gender gap in financial literacy of university students exists, what factors can explain the gap? We used three-question single choice test to measure debt literacy - a little-studied aspect of financial literacy - and processed its results to obtain different markers of the literacy, allowing us to control for guessing and overconfidence effects. To gauge the possible gender gap in the literacy, we checked the statistical significance of differences in the test responses between female and male survey participants. We also ran a series of logistic regressions to rule out the possibility that gender differences found in the debt literacy test scores due to non-parametric tests were driven by factors other than gender. We confirm the gender differential in debt literacy among university students comprising our sample. We find that the observed gender gap cannot be explained by the combined effects of test guessing and overconfidence. Female business (including finance) students scored significantly better in a debt literacy test compared to their non-business female peers - an effect not present among male students. This could suggest that - unlike women who tend to increase their debt literacy through professional education - men may acquire the literacy differently and outside the formal education system.