Economic competence and gender: Magnitude and roots of the gender gap

Abstract

A large body of literature documents substantial gender differences in adolescents’ economic capabilities, yet, causes for these differences are poorly understood. This paper explores gender differences in economic competences and its roots using a representative sample of 10th graders with more than 1000 respondents from Southwest Germany. Our data reveal a significant gender gap in favor of male students by a magnitude of 0.28 standard deviation units. Quantile regressions show that the gender gap occurs independently from various distribution moments. Multivariate analyses reveal that the difference in competence is partly driven by variation in economic interest and mathematical abilities, which explains almost 35% of the total difference. In contrast, socio-cognitive skills (e.g., financial confidence and attitudes towards money) appear to have no explanatory power. In addition, our results suggest that the gender gap is even larger when we control for differences in test-taking effort.