Accessible Version
Question design and the gender gap in financial literacy, Accessible Data
Figure 1. Financial literacy questions, by gender
| Interest | Inflation | Diversification | ||||
|---|---|---|---|---|---|---|
| Men | Women | Men | Women | Men | Women | |
| Correct | 75 | 65 | 72 | 57 | 52 | 34 |
| Incorrect | 10 | 13 | 8 | 11 | 5 | 3 |
| Don't Know | 16 | 22 | 20 | 32 | 43 | 63 |
Note: Authors’ calculations among the one-half of the 2021 SHED respondents who were asked the questions including “don’t know” as an answer. Key identifies bars in order of left to right.
Figure 2. Share correct, by gender and whether respondent received the “don’t know” option
| Question | Did not receive "don't know" | Received "don't know" | ||
|---|---|---|---|---|
| Men | Women | Men | Women | |
| Risk Diversification | 85 | 84 | 52 | 34 |
| Inflation | 78 | 71 | 72 | 57 |
| Interest | 84 | 78 | 75 | 65 |
Note: Authors’ calculations using the 2021 SHED sample. Key identifies bars in order from top to bottom.
Figure 3. Illustration of decomposition
This horizontal stacked bar chart is a stylized depiction, without any numbers attached, which illustrates our method for decomposing the increase in correct responses to a financial literacy question when the “don’t know” response option is omitted. We use this method to decompose the increase into two parts: the component due to guessing, and the residual increase.
Starting from the left side of the figure, the blue portion of the bar labelled “A” represents the share of adults who answered the question correctly when the “don’t know” option was included. The full length of the entire stacked bar, labelled below the bar by “B”, represents the share of adults who answered the question correctly when the “don’t know” option was excluded. Since the share of adults answering correctly was higher when the “don’t know” answer option was not present, B is larger than A. The overall increase in the share of adults answering correctly when “don’t know” is omitted – calculated as B less A – is represented by the section of the bar labelled above the bar as “O”.
Returning to the pieces of the bar, adjacent to A, the lighter orange portion of the bar labelled “G” represents the hypothetical share that would have answered the question correctly if everyone who had originally answered “don’t know” guessed an answer at random. We estimate G by imputing a response for the people who answered “don’t know” to the question when that answer choice was included. Next, and adjacent to “G”, the darker orange portion of the bar labelled “R” is the residual increase, which is the portion of the increase in correct responses that is above what we would expect if everyone who had originally answered “don’t know” simply guessed a response. We compute the residual increase in the share correct, R, as B less the sum of A plus G.
Figure 4. Decomposing increase in ‘Correct' share into increase due to guessing and residual increase
| Correct answer for question including DK | Residual increase | Estimate of correct guesses when DK is omitted | |
|---|---|---|---|
| Panel A. Interest Rate Question | |||
| Men | 75 | 4 | 5 |
| Women | 65 | 6 | 7 |
| Panel B. Inflation Question | |||
| Men | 72 | 1 | 6 |
| Women | 57 | 4 | 10 |
| Panel C. Risk Diversification Question | |||
| Men | 52 | 12 | 22 |
| Women | 34 | 18 | 32 |
Note: Authors’ calculations using 2021 SHED sample. Key identifies bars in order from left to right. Bar sections may not sum to overall totals due to rounding.