Girls Doubt Their Own Financial Skills More Than Boys – And It’s Holding Them Back

Female high school students are less confident in their economic literacy than their male counterparts, even when they demonstrate a strong grasp of major economic concepts, according to a concerning new report from the Reserve Bank of Australia.

In the central bank’s latest gazette, released Thursday, lead analyst Joyce Tan posits the existence of a major “confidence gap” separating male and female economics students in their final years of high school.

Survey data collected from more than 2,000 students in schools across the country shows 30% of female economics students self-reported a poor understanding of monetary policy, compared to 20% of males.

The effect was mirrored on the other end of the scale. The proportion of female students self-reporting a solid understanding was 30%, but 45% of males were highly confident in their economic literacy.

The survey also asked students to complete a short quiz based on Australian monetary policy.

Significantly, the data shows that female students are less likely than males to vouch for their economic knowledge — despite quiz results proving their aptitude.

In a model which accounted for their actual quiz results, young women were still 7.5% more likely than young men to report a poor understanding of economic concepts.

Female students were also 4.5% less likely to rank themselves highly compared to their male counterparts.

In effect, young women are considerably more likely to doubt their economic know-how, even when test results prove their proficiency.

The findings are important, Tan said, as lower levels of economic confidence among young women may deter them from pursuing it as a career.

A 2019 Grattan Institute report found male students were significantly more likely than women to enrol in undergraduate economics and finance degrees, a split which has endured since the early 1990s.

This gender imbalance could have a major impact on the nation’s economic outcomes. Gender diversity has been proven to elevate the performance of businesses, teams, and lawmakers, Tan said.

These benefits are important in economics, as “those with economics backgrounds often go on to work in roles where their decisions affect many people,” she said.

“Furthermore, as those who study economics shape the discipline and are involved in setting public policies, there are wider social benefits when they are more representative of society.”

Given the falling number of female high school students undertaking economics classes, and hard evidence of a confidence gap, “it is important for the economics community to consider how to address this issue,” Tan said.

Interestingly, the drop in formal engagement with economics coincides with a pandemic-era surge in interest in personal finance.

Young women were the fastest-growing cohort of exchange-traded fund investors through 2021, investment house State Street Global Advisors said last year.

Meanwhile, wildly popular podcasts like She’s On The Money, hosted by Australian financial adviser Victoria Devine, have spread economic and financial knowledge to under-served audiences.

There may be lessons to be learned from such high-profile outreach efforts, as Tan said championing female economics teachers and highlighting the work of women in the field could shrink the high school confidence gap.

“These findings suggest that interventions intended to narrow the confidence gap for female students are likely to have positive effects on females looking to study economics or work in the economics profession,” she said.

“For example, both the RBA and those working in the economics field could consider increasing the representation of female role models amongst their economists, female economics teachers and female advocates for economics in the public domain.”