Gender differences in financial literacy among teenagers - Can confidence bridge the gap?

Figures & data

Table 1. Summary statistics

		Female (n = 313)		Male (n = 296)
		Mean	SD	Mean	SD
Confidence Variables
A priori confidence	Inspired by the high school grading scale (1 = low, 5 = high)	3.05***	0.74	3.45	0.75
Ex post confidence	Expected correct responses over all 13 questions	6.10***	3.03	7.93	3.04
Literacy Variables
Basic literacy score	Correct responses to the 5 basic literacy questions	3.17**	1.35	3.52	1.39
Sophisticated literacy score	Correct responses to the 8 sophisticated literacy questions	4.13***	1.90	4.95	1.78
Total literacy score	Correct responses to the total 13 financial literacy questions	7.03***	2.84	8.47	2.78
Accuracy	Ex post confidence assessment minus actual total score	−1.22**	2.68	−0.53	3.00
Nr. IDK	Questions marked as “I don´t know”	1.82***	2.25	1.03	1.65
Independent Variables
Cognitive abilities	Correct responses to the three cognitive reflection questions	1.34*	1.08	1.55	1.15
Under 16 years	Dummy variable (1 = under 16 years, 0 = above 16 years)	0.31		0.31
Risk association	Dummy variable (1 = risk as chance, 0 = risk as thread)	0.73***		0.50
Side job	Dummy variable (1 = job, 0 = no job)	0.38		0.41
Saving	Dummy variable (1 = saving, 0 = no saving)	0.83		0.84
Household income	Dummy variable (1 = own real estate, 0 = rent)	0.71		0.71
Integration (parents’ birthplace)	Dummy variable (1 = Germany, 0 = elsewhere)	0.80		0.77
Club membership	Dummy variable (1 = membership, 0 = no membership)	0.59		0.62
Mathematics grade	Grade in math from the last report card (1 = fail, 6 = excellent)	4.39	1.18	4.42	1.13
German grade	Grade in German from the last report card (1 = fail, 6 = excellent)	4.73***	0.91	4.23	0.98
English grade	Grade in English from the last report card (1 = fail, 6 = excellent)	4.73***	1.02	4.38	1.03
Gymnasium	Attended high school type (1 = Gymnasium, 0 = other)	0.58*		0.48
Realschule	Attended high school type (1 = Realschule, 0 = other)	0.32		0.36
Hauptschule	Attended high school type (1 = Hauptschule, 0 = other)	0.10*		0.16

Note: The order of the grade variables was subsequently reversed to enable a straightforward interpretation of the results. Differences in means were assessed with Welch’s unpaired t-test for all but the dichotomous variables where Fisher’s exact test was applied. *** p < 0.001, ** p < 0.01, * p < 0.05.

Table 2. Influence of confidence in explaining the gender gap in basic literacy

	Basic Literacy
	(1)	(2)	(3)	(4)
A priori confidence		0.269*** (4.234)		0.140* (2.101)
Ex post confidence			0.366*** (6.492)	0.320*** (5.297)
Female	−0.357*** (−3.561)	−0.263** (−2.588)	−0.192 (−1.918)	−0.164 (−1.623)
Cognitive abilities	0.414*** (8.841)	0.405*** (8.754)	0.367*** (7.987)	0.368*** (8.034)
Under 16 years	−0.233* (−2.013)	−0.229* (−2.010)	−0.206 (−1.843)	−0.208 (−1.854)
Risk association	−0.011 (−0.213)	0.025 (0.494)	−0.007 (0.152)	−0.004 (−0.040)
Side job	−0.038 (−0.386)	−0.026 (−0.275)	−0.037 (−0.388)	−0.031 (−0.328)
Saving	0.265* (2.068)	0.221 (1.740)	0.201 (1.613)	0.186 (1.494)
Household income	0.167 (1.490)	0.149 (1.352)	0.124 (1.143)	0.120 (1.112)
Integration	0.256* (2.055)	0.273* (2.225)	0.252* (2.097)	0.262* (2.181)
Club membership	−0.099 (−0.970)	−0.140 (−1.387)	−0.146 (−1.471)	−0.161 (−1.629)
Mathematics grade	0.110* (2.428)	0.099* (2.220)	0.083 (1.901)	0.081 (1.855)
German grade	0.052 (0.907)	0.047 (0.838)	0.036 (0.646)	0.036 (0.641)
English grade	0.028 (0.532)	0.006 (0.111)	0.039 (0.771)	0.026 (0.514)
Gymnasium	0.448* (2.435)	0.452* (2.492)	0.399* (2.240)	0.407* (2.293)
Realschule	−0.184 (−1.084)	−0.185 (−1.102)	−0.199 (−1.209)	−0.197 (−1.203)
Observations	609	609	609	609
R^2	0.343	0.363	0.387	0.392
Adjusted R^2	0.328	0.347	0.372	0.375
Residual std. error	1.130	1.114	1.093	1.090
F statistic	22.195***	22.502***	24.960***	23.812***

Note: This table reports results of OLS regressions on basic literacy with different inclusions of confidence variables. The Hauptschule variable is omitted as it serves as reference for Gymnasium and Realschule. t-statistics are shown in parentheses. *** p < 0.001, ** p < 0.01, * p < 0.05.

Table 3. Influence of confidence in explaining the gender gap in sophisticated literacy

	Sophisticated Literacy
	(1)	(2)	(3)	(4)
A priori confidence		0.498*** (5.363)		0.226* (2.374)
Ex post confidence			0.754*** (9.348)	0.679*** (7.873)
Female	−0.862*** (−5.814)	−0.686*** (−4.619)	−0.523*** (−3.653)	−0.477*** (−3.314)
Cognitive abilities	0.308*** (4.442)	0.290*** (4.283)	0.210** (3.199)	0.212** (3.239)
Under 16 years	−0.196 (−1.148)	−0.189 (−1.135)	−0.140 (−0.874)	−0.142 (−0.894)
Risk association	−0.074 (−1.005)	−0.009 (−0.119)	−0.037 (−0.539)	−0.011 (−0.162)
Side job	0.060 (0.414)	0.080 (0.571)	0.062 (0.459)	0.071 (0.529)
Saving	0.358 (1.888)	0.275 (1.482)	0.225 (1.267)	0.201 (1.133)
Household income	0.225 (1.360)	0.193 (1.190)	0.137 (0.884)	0.131 (0.849)
Integration	0.207 (1.128)	0.240 (1.334)	0.201 (1.167)	0.216 (1.261)
Club membership	0.212 (1.403)	0.135 (0.912)	0.116 (0.820)	0.091 (0.642)
Mathematics grade	0.014 (0.214)	−0.005 (−0.084)	−0.040 (−0.635)	−0.043 (−0.695)
German grade	0.121 (1.424)	0.112 (1.353)	0.088 (1.104)	0.087 (1.101)
English grade	0.052 (0.661)	0.010 (0.134)	0.075 (1.026)	0.0538 (0.735)
Gymnasium	1.017*** (3.741)	1.024*** (3.856)	0.916*** (3.603)	0.929*** (3.669)
Realschule	0.633* (2.516)	0.632* (2.570)	0.603* (2.565)	0.605** (2.585)
Observations	609	609	609	609
R^2	0.234	0.270	0.333	0.339
Adjusted R^2	0.216	0.251	0.316	0.321
Residual std. error	1.670	1.632	1.563	1.554
F statistic	12.990***	14.608***	19.712***	18.983***

Note: This table reports results of OLS regressions on sophisticated literacy with different inclusions of confidence variables. The Hauptschule variable is omitted as it serves as reference for Gymnasium and Realschule. t-statistics are shown in parentheses. *** p < 0.001, ** p < 0.01, * p < 0.05.

Table 4. Decomposition of gender differences for basic and sophisticated literacy

	Basic Literacy	Sophisticated Literacy
A priori confidence	0.062*	0.078*
Ex post confidence	0.131***	0.302***
Cognitive abilities	0.076***	0.053***
Under 16	0.000*	0.000
Risk association	0.004	0.019
Side job	−0.001	−0.000
Saving	0.000	0.000
Household income	0.000	0.000
Integration	−0.011*	−0.012
Club membership	−0.010	0.006
Math Grade	0.003	−0.003
German grade	−0.009	−0.026
English grade	−0.011	−0.032
Gymnasium	−0.046*	−0.061***
Realschule	−0.005	0.013**
Female score	3.160	4.095
Male score	3.471	4.937
Group difference	0.311	0.842
Explained difference	0.186	0.336
Unexplained difference	0.125	0.506

Note: This table reports a two-fold Oaxaca decomposition that includes the indicator variable (female). The Hauptschule variable is omitted as it serves as reference for Gymnasium and Realschule. t-statistics are shown in parentheses. *** p < 0.001, ** p < 0.01, * p < 0.05.

Table 5. Determinants of confidence

	A priori stated confidence		Ex post confidence
	Female	Male	Female	Male
Cognitive abilities	0.017 (0.383)	0.054 (1.294)	0.619*** (3.619)	0.558*** (3.459)
Under 16 years	−0.074 (−0.728)	0.051 (0.465)	0.224 (0.565)	−0.669 (−1.578)
Risk association	−0.153 (−1.613)	−0.284** (−3.316)	−0.162 (−0.442)	−0.437 (−1.323)
Side job	−0.162 (−1.838)	0.094 (1.054)	−0.385 (−1.115)	0.153 (0.446)
Saving	0.197 (1.742)	0.113 (0.941)	0.666 (1.506)	0.412 (0.890)
Household income	0.160 (1.629)	−0.047 (−0.433)	0.319 (0.833)	0.212 (0.505)
Integration	−0.071 (−0.615)	−0.100 (−0.859)	0.323 (0.722)	−0.120 (−0.270)
Club membership	0.206* (2.235)	0.119 (1.247)	0.426 (1.186)	0.333 (0.908)
Mathematics grade	0.028 (0.686)	0.058 (1.391)	0.501** (3.106)	0.187 (1.172)
German grade	−0.008 (−0.143)	0.039 (0.783)	0.101 (0.463)	0.224 (1.178)
English grade	0.087 (1.799)	0.090 (1.887)	−0.220 (−1.169)	0.032 (0.177)
Gymnasium	−0.099 (−0.585)	0.092 (0.544)	0.437 (0.662)	1.092 (1.684)
Realschule	0.025 (0.156)	−0.008 (−0.053)	0.499 (0.807)	−0.009 (−0.015)
Observations	313	296	313	296
R^2	0.085	0.133	0.161	0.218
Adjusted R^2	0.045	0.093	0.125	0.182
Residual std. error	0.726	0.717	2.833	2.753
F statistic	2.129**	3.324***	4.424***	6.057***

Note: This table reports results of OLS regressions on a priori and ex post confidence by gender. The Hauptschule variable is omitted as it serves as reference for Gymnasium and Realschule. t-statistics are shown in parentheses. *** p < 0.001, ** p < 0.01, * p < 0.05.

Table 6. Determinants of basic literacy on high school students with economic expertise

	Basic Literacy
	(1)	(2)	(3)	(4)
A priori confidence		0.025 (0.135)		−0.003 (−0.015)
Ex post confidence			0.115 (0.751)	0.116 (0.732)
Female	0.011 (0.040)	0.013 (0.045)	0.069 (0.232)	0.069 (0.230)
Cognitive abilities	0.330* (2.355)	0.328* (2.306)	0.334* (2.372)	0.334* (2.336)
Under 16 years	−0.666 (−0.515)	−0.672 (−0.516)	−0.664 (−0.512)	−0.663 (−0.506)
Risk association	−0.163 (−1.265)	−0.155 (−1.095)	−0.174 (−1.339)	−0.175 (−1.209)
Side job	−0.129 (−0.454)	−0.130 (−0.455)	−0.154 (−0.535)	−0.154 (−0.530)
Saving	−0.130 (−0.254)	−0.144 (−0.273)	−0.037 (−0.070)	−0.035 (−0.064)
Household income	1.965 (1.037)	1.889 (0.948)	2.075 (1.088)	2.085 (1.033)
Integration	0.499 (0.593)	0.535 (0.602)	0.517 (0.612)	0.513 (0.575)
Club membership	−0.164 (−0.551)	−0.171 (−0.560)	−0.155 (−0.515)	−0.154 (−0.502)
Mathematics grade	−0.089 (−0.625)	−0.089 (−0.622)	−0.123 (−0.822)	−0.123 (−0.814)
German grade	0.023 (0.124)	0.028 (0.148)	0.013 (0.069)	0.012 (0.064)
English grade	0.048 (0.258)	0.047 (0.251)	0.036 (0.195)	0.036 (0.193)
Observations	71	71	71	71
R^2	0.221	0.221	0.228	0.228
Adjusted R^2	0.060	0.043	0.052	0.035
Residual std. error	1.110	1.120	1.115	1.125
F statistic	1.369	1.244	1.298	1.184

Note: This table reports results of OLS regressions on basic literacy with different inclusions of confidence variables. t-statistics are shown in parentheses. *** p < 0.001, ** p < 0.01, * p < 0.05.

Table 7. Determinants of sophisticated literacy on high school students with expertise

	Sophisticated Literacy
	(1)	(2)	(3)	(4)
A priori stated confidence		0.099 (0.341)		0.039 (0.132)
Ex post confidence			0.075 (1.079)	0.074 (1.023)
Female	−1.033* (−2.286)	−1.026* (−2.251)	−0.980* (−2.081)	−0.982* (−2.066)
Cognitive abilities	0.371 (1.682)	0.362 (1.622)	0.386 (1.749)	0.382 (1.705)
Under 16 years	1.296 (0.638)	1.271 (0.620)	1.340 (0.660)	1.329 (0.648)
Risk association	−0.150 (−0.738)	−0.119 (−0.535)	−0.164 (−0.807)	−0.151 (−0.672)
Side job	−0.707 (−1.579)	−0.712 (−1.579)	−0.729 (−1.608)	−0.731 (−1.598)
Saving	−0.027 (−0.034)	−0.082 (−0.099)	0.138 (0.169)	0.112 (0.133)
Household income	1.410 (0.473)	1.109 (0.354)	1.662 (0.556)	1.536 (0.486)
Integration	1.651 (1.245)	1.791 (1.281)	1.688 (1.275)	1.743 (1.247)
Club membership	0.152 (0.323)	0.128 (0.267)	0.202 (0.427)	0.191 (0.395)
Mathematics grade	0.123 (0.549)	0.122 (0.541)	0.043 (0.183)	0.045 (0.188)
German grade	0.018 (0.064)	0.038 (0.130)	−0.010 (−0.033)	−0.001 (−0.003)
English grade	0.327 (1.127)	0.323 (1.106)	0.337 (1.163)	0.335 (1.146)
Observations	71	71	71	71
R^2	0.269	0.270	0.284	0.284
Adjusted R^2	0.118	0.104	0.120	0.105
Residual std. error	1.748	1.761	1.745	1.761
F statistic	1.923	1.626	1.633	1.496

Note: This table reports results of OLS regressions on sophisticated financial literacy with different inclusions of confidence variables. t-statistics are shown in parentheses. *** p < 0.001, ** p < 0.01, * p < 0.05.

Table A1. Linear regression on Total Literacy with Accuracy as independent variable

	Total Literacy
Accuracy	−0.351*** (−11.215)
Female	−1.398*** (−7.333)
Cognitive abilities	0.664*** (7.473)
Under 16 years	−0.348 (−1.590)
Risk association	−0.129 (−1.369)
Side job	−0.032 (−0.175)
Saving	0.606* (2.497)
Household income	0.369 (1.740)
Integration	0.371 (1.572)
Club membership	0.209 (1.080)
Mathematics grade	0.193* (2.245)
German grade	0.185 (1.700)
English grade	0.010 (0.097)
Gymnasium	1.185*** (3.394)
Realschule	0.330 (1.022)
Observations	609
R^2	0.4558
Adjusted R^2	0.442
Residual std. error	2.143
F statistic	33.11***

Note: This table reports results of a OLS regression on total literacy that includes an accuracy variable. The Hauptschule variable is omitted as it serves as reference for Gymnasium and Realschule. t-statistics are shown in parentheses. *** p < 0.001, ** p < 0.01, * p < 0.05.