AccScience Publishing / IJPS / Online First / DOI: 10.36922/ijps.4403
RESEARCH ARTICLE

Do female-headed households have poorer financial health compared to male-headed households? Evidence from China

Yingying Zhang1* Kenan Li2 Jin Huang1,3
Show Less
1 School of Social Work, Saint Louis University, St. Louis, Missouri, United States of America
2 Department of Epidemiology and Biostatistics, College of Public Health and Social Justice, Saint Louis University, St. Louis, Missouri, United States of America
3 Center for Social Development, Washington University in St. Louis, St. Louis, Missouri, United States of America
Submitted: 1 August 2024 | Accepted: 17 October 2024 | Published: 4 November 2024
© 2024 by the Author(s). This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution 4.0 International License ( https://creativecommons.org/licenses/by/4.0/ )
Abstract

The global trend of financialization has introduced significant risks and uncertainties, exacerbated by the outbreak of the COVID-19 pandemic, which has affected the economic and financial conditions of various groups. While existing research indicates that women generally exhibit lower levels of financial literacy and tend to have less access to financial resources compared to men, empirical research on gender disparity in financial health is still limited. This study aims to bridge this gap by analyzing gender differences in household financial health, using nationally representative household data from China and propensity score matching analyses. Contrary to prevalent beliefs, the findings reveal better financial health among female-headed households. For example, using the nearest neighbor matching, we found that female-headed households have a better balance of income and expenditure than male-headed households (β = 0.173, p < 0.001). Moreover, female-headed households are more likely to possess commercial insurance (β = 0.433, p < 0.001) and investment products than male-headed households (β = 0.082, p < 0.05). In addition, considering that women manage the day-to-day household consumption and are financial outperforming men, the implementation of household finance-related policies and programs, such as asset-building policies and Children’s Development Accounts, would be more effective if targeted toward women in households.

Keywords
China
Financial health
Gender differences
Household finance
Propensity score matching
Funding
None.
Conflict of interest
The authors declare no conflict of interest.
References

Al‐Bahrani, A., Weathers, J., & Patel, D. (2019). Racial differences in the returns to financial literacy education. Journal of Consumer Affairs, 53(2):572-599. https://doi.org/10.1111/joca.12205

 

Albanesi, S., & Olivetti, C. (2009). Home production, market production and the gender wage gap: Incentives and expectations. Review of Economic Dynamics, 12(1):80-107. https://doi.org/10.1016/j.red.2008.08.001

 

Allgood, S., & Walstad, W. (2012). The effects of perceived and actual financial literacy on financial behaviors. Journal of Economic Psychology, 33(4):668-680. https://doi.org/10.2139/ssrn.2191606

 

Almenberg, J., & Dreber, A. (2012). Gender, stock market participation, and financial literacy. SSRN Electronic Journal, 137. https://doi.org/10.2139/ssrn.1880909

 

American Bankers Association, Consumer Bankers Association, Independent Community Bankers of America, & U.S. Chamber of Commerce. (2022). Unfairness and Discrimination: Examining the CFPB’s Conflation of Distinct Statutory Concepts. Available from: https://www. icba.org/docs/default-source/icba/advocacy-documents/ reports/unfairness-and-discrimination-examining-the-cfpbs-conflation-of-distinct-statutory-concepts.pdf?utm_ medium=&utm_source=&utm_campaign=&utm_ term=&utm_content= [Last accessed on 2024 Oct 31].

 

Arano, K., Parker, C., & Terry, R. (2010). Gender-based risk aversion and retirement asset allocation. Economic Inquiry, 48(1):147-155. https://doi.org/10.1111/j.1465-7295.2008.00201.x

 

Arber, S., Fenn, K., & Meadows, R. (2014). Subjective financial well-being, income and health inequalities in mid and later life in Britain. Social Science & Medicine, 100:12-20. https://doi.org/10.1016/j.socscimed.2013.10.016

 

Barber, B.M., & Odean, T. (2001). Boys will be boys: Gender, overconfidence, and common stock investment. Quarterly Journal of Economics, 116(1):261-292. https://doi.org/10.2139/ssrn.139415

 

Behrman, J.R., Mitchell, O.S., Soo, C.K., & Bravo, D. (2012). How financial literacy affects household wealth accumulation. American Economic Review: Papers and Proceedings, 102(3):300-304. https://doi.org/10.1257/aer.102.3.300

 

Bethune, S. (2015). Money stress weighs on Americans’ health. Monitor on Psychology, 46(4):38.

 

Blau, F.D., & Kahn, L.M. (2017). The gender wage gap: Extent, trends, and explanations. Journal of Economic Literature, 55(3):789-865. https://doi.org/10.1257/jel.20160995

 

Booysen, F., & Guvuriro, S. (2021). Gender differences in intra-household financial decision-making: An application of coarsened exact matching. Journal of Risk and Financial Management, 14(10):469. https://doi.org/10.3390/jrfm14100469

 

Bottazzi, L., & Lusardi, A. (2016). Gender Difference in Financial Literacy: Evidence from PISA Data in Italy. Available from: https://institute.eib.org/wp-content/uploads/2016/10/ gender-diff.pdf [Last accessed on 2024 Oct 31].

 

Braveman, P., Heck, K., Egerter, S., Rinki, C., Marchi, K., & Curtis, M. (2018). Economic hardship in childhood: A neglected issue in ACE studies? Maternal and Child Health Journal, 22(3):308-317. https://doi.org/10.1007/s10995-017-2368-y

 

Brune, L., Karlan, D., & Rouse, R. (2020). Measuring Financial Health Around the Globe. Innovations for Poverty Action. Available from: https://poverty-action.org/sites/default/ files/publications/ipa%20financial%20health%20-%20 full%20report%20final.pdf [Last accessed on 2024 Oct 31].

 

Bucher-Koenen, T., Lusardi, A., Alessie, R., & Van Rooij, M. (2017). How financially literate are women? An overview and new insights. The Journal of Consumer Affairs, 51(2):255-283. https://doi.org/10.1111/joca.12121

 

Cavalluzzo, K.S., Cavalluzzo, L.C., & Wolken, J.D. (2002). Competition, small business financing, and discrimination: Evidence from a new survey. The Journal of Business, 75(4):641-679. https://doi.org/10.1086/341638

 

Center for Financial Services Innovation. (2015). Understanding and Improving Consumer Financial Health in America. CFSI Consumer Financial Health Study. Available from: https:// assetfunders.org/wp-content/uploads/cfsi_consumer_ financial_health_0415.pdf [Last accessed on 2024 Oct 31].

 

Chang, M.L. (2010). Shortchanged: Why Women have Less Wealth and What Can be Done about It. United Kingdom: Oxford Academic. https://doi.org/10.1093/acprof:oso/9780195367690.001.0001

 

Charness, G., & Gneezy, U. (2012). Strong evidence for gender differences in risk taking. Journal of Economic Behavior & Organization, 83(1):50-58. https://doi.org/10.1016/j.jebo.2011.06.007

 

Chen, Y.C., & Sun, S. (2023). Gender differences in the relationship between financial capability and health in later life: Evidence from Hong Kong. Innovation in Aging, 7(1):igad072. https://doi.org/10.1093/geroni/igad072

 

Chou, E.Y., Parmar, B.L., & Galinsky, A.D. (2016). Economic insecurity increases physical pain. Psychological Science, 27(4):443-454. https://doi.org/10.1177/0956797615625640

 

Consumer Financial Protection Bureau (CFPB). (2017). Measuring Financial Well-being: A Guide to Using the CFPB Financial Well-Being Scale. Consumer Financial Protection Bureau. Available from: https://www.consumerfinance.gov/ data-research/research-reports/financial-well-being-scale [Last accessed on 2024 Oct 31].

 

Cornwall, A.C., Byrne, K.A., & Worthy, D.A. (2018). Gender differences in preference for reward frequency versus reward magnitude in decision-making under uncertainty. Personality and Individual Differences, 135:40-44. https://doi.org/10.1016/j.paid.2018.06.031

 

Croson, R., & Gneezy, U. (2009). Gender differences in preferences. Journal of Economic Literature, 47(2):448-474. https://doi.org/10.1257/jel.47.2.448

 

Cupples, S., Rasure, E., & Grable, J. (2013). Educational achievement as a mediator between gender and financial risk tolerance: An exploratory study. Ewha Journal of Social Sciences, 29(1):151-179. https://doi.org/10.16935/ejss.2013.29.004

 

Cutts, D.B., Meyers, A.F., Black, M.M., Casey, P.H., Chilton, M., Cook, J.T., et al. (2011). US housing insecurity and the health of very young children. American Journal of Public Health, 101(8):1508-1514. https://doi.org/10.2105/AJPH.2011.300139

 

Despard, M.R., Friedline, T., & Martin-West, S. (2020). Why do households lack emergency savings? The role of financial capability. Journal of Family and Economic Issues, 41(3):542-557. https://doi.org/10.1007/s10834-020-09679-8

 

Diane, O., Jennifer E.B., Joelle S.L., & Nari R. (2016). Shortchanged in Retirement: Continuing Challenges to Women’s Financial Future. National Institute on Retirement Security. Available from: https://www.nirsonline.org/reports/shortchanged-in-retirement-continuing-challenges-to-womens-financial-future [Last accessed on 2024 Oct 31].

 

Dickler, J. (2023). This is what Women Must do to Overcome the Retirement Savings Shortfall, Says a Financial Pro. CNBC. Available from: https://www.cnbc.com/2022/06/22/ heres-how-women-can-overcome-the-retirement-savings-shortfall.html [Last accessed on 2024 Oct 31].

 

Durmaz, N., Bodur, N., Dudu, S., Bozkuş, S.C., & Elveren, A.Y. (2023). Gender differences in risk aversion: Evidence from private pension system in Türkiye. Women’s Studies International Forum, 101:102843. https://doi.org/10.1016/j.wsif.2023.102843

 

Fernandes, D., Lynch, J.G. Jr., & Netemeyer, R.G. (2014). Financial literacy, financial education, and downstream financial behaviors. Management Science, 60(8):1861-1883. https://doi.org/10.1287/mnsc.2013.1849

 

Fisher, P.J., & Yao, R. (2017). Gender differences in financial risk tolerance. Journal of Economic Psychology, 61:191-202. https://doi.org/10.1016/j.joep.2017.03.006

 

Fonseca, R., Mullen, K.J., Zamarro, G., & Zissimopoulos, J. (2012). What explains the gender gap in financial literacy? The role of household decision making. Journal of Consumer Affairs, 46(1):90-106. https://doi.org/10.1111/j.1745-6606.2011.01221.x

 

Frydman, C., & Camerer, C.F. (2023). The psychology and neuroscience of financial decision making. Annual Review of Economics, 15:383-409.

 

Govindapuram, S., Bhupatiraju, S., & Sirohi, R.A. (2022). Determinants of women’s financial inclusion: Evidence from India. Asia-Pacific Economic Review, 94(1):131-158. https://doi.org/10.1111/apce.12376

 

Gubbay, N., & McKay, L.C. (2024). The Many Dimensions of Income Inequality. Federal Reserve Bank of Minneapolis. Available from: https://www.minneapolisfed.org/article/2024/the-many-dimensions-of-income-inequality#:~:text=at%20 the%20top%20of%20the,percent%20of%20what%20 men%20earned [Last accessed on 2024 Oct 31].

 

Gudjonsson, S., Minelgaite, I., Kristinsson, K., & Pálsdóttir, S. (2022). Financial literacy and gender differences: Women choose people while men choose things? Administrative Sciences, 12(4):179. https://doi.org/10.3390/admsci12040179

 

Harris, C.R., Jenkins, M., & Glaser, D. (2006). Gender differences in risk assessment: Why do women take fewer risks than men? Judgment and Decision Making, 1(1):48-63. https://doi.org/10.1017/S1930297500000346

 

Hasler, A., & Lusardi, A. (2017). The Gender Gap in Financial Literacy: A Global Perspective. Global Financial Literacy Excellence Center, The George Washington University. Available from: https://gflec.org/wp-content/ uploads/2017/07/the-gender-gap-in-financial-literacy-a-global-perspective-report.pdf [Last accessed on 2024 Oct 31].

 

Hira, T.K., & Loibl, C. (2008). Gender differences in investment behavior. In: Xiao, J.J. (ed.). Handbook of Consumer Finance Research. New York: Springer. https://doi.org/10.1007/978-0-387-75734-6_15

 

Hollingdale, H. (2020). Testing the Lehman Sisters’ Hypothesis: Gender, Professionals, and Risk in the Finance Sector. In: Conference Papers - American Sociological Association. Vancouver: University of British Columbia, p.1-30. https://doi.org/10.14288/1.0390450 https://doi.org/10.1007/s11187-016-9773-2

 

International Monetary Fund. (2021). World Economic Outlook: Managing Divergent Recoveries. Available from: https://socialprotection.org/discover/publications/world-economic-outlook-managing-divergent-recoveries [Last accessed on 2024 Oct 31].

 

Itzkowitz, J., Itzkowitz, J., & Schwartz, A. (2023). The gender gap in stock market participation: Evidence from stock gifting. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4539694

 

Johnson, K., Smith, B., & Butrica, B. (2023). Lifetime Employment-related Costs to Women of Providing Family Care. Urban Institute. Available from: https://www.dol. gov/sites/dolgov/files/wb/mothers-families-work/lifetime-caregiving-costs_508.pdf [Last accessed on 2024 Oct 31].

 

Kairiza, T., Kiprono, P., & Magadzire, V. (2017). Gender differences in financial inclusion amongst entrepreneurs in Zimbabwe. Small Business Economics, 48(1):259-272.

 

Kaiser, T., & Menkhoff, L. (2017). Does financial education impact financial literacy and financial behavior, and if so, when? The World Bank Economic Review, 31(3):611-630. https://doi.org/10.1093/wber/lhx018

 

Kawachi, I., & Kennedy, B.P. (1999). Income inequality and health: Pathways and mechanisms. Health Services Research, 34(1 Pt 2):215-227.

 

Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1):5-44. https://doi.org/10.1257/jel.52.1.5

 

Marques, H. (2015). Does the gender of top managers and owners matter for firm exports? Feminist Economics, 21(4):89-117. https://doi.org/10.1080/13545701.2015.1029958

 

Morsy, H. (2020). Access to finance - Mind the gender gap. The Quarterly Review of Economics and Finance, 78:12-21. https://doi.org/10.1016/j.qref.2020.02.005

 

Muravyev, A., Schafer, D., & Talavera, O. (2009). Entrepreneurs’ gender and financial constraints: Evidence from international data. Journal of Comparative Economics, 37(2):270-286. https://doi.org/10.1016/j.jce.2008.12.001

 

Niederle, M., & Vesterlund, L. (2007). Do women shy away from competition? Do men compete too much? The Quarterly Journal of Economics, 122(3):1067-1101. https://doi.org/10.1162/qjec.122.3.1067

 

Owusu, G.M.Y., Korankye, G., Yankah, N.Y.M., & Donkor, J.B.A. (2023). Financial risk tolerance and its determinants: The perspective of personnel from security services in Ghana. Borsa Istanbul Review, 23(4):852-864. https://doi.org/10.1016/j.bir.2023.02.005

 

Parker, S., Castillo, N., Garon, T., & Levy, R. (2016). Eight Ways to Measure Financial Health. Financial Health Network. Available from: https://finhealthnetwork.org/research/ eight-ways-to-measure-financial-health [Last accessed on 2024 Oct 31].

 

Sahay, R., Cihak, M., N’Diaye, P., Barajas, A., Ayala Pena, D., Bi, R., et al. (2021). Financial Inclusion: Can it Meet Multiple Macroeconomic Goals? United States: International Monetary Fund. https://doi.org/10.5089/9781513585154.006

 

Schubert, R., Brown, M., Gysler, M., & Brachinger, H.W. (1999). Financial decision-making: Are women really more risk-averse? The American Economic Review, 89(2):381-385. https://doi.org/10.1257/aer.89.2.381

 

Smith, J.P., McArdle, J.J., & Willis, R. (2010). Financial decision making and cognition in a family context. The Economic Journal (London), 120(549):F363-F380. https://doi.org/10.1111/j.1468-0297.2010.02394.x

 

Staveren, I. (2014). The Lehman sisters hypothesis. Cambridge Journal of Economics, 38(5):995-1014. https://doi.org/10.1093/cje/beu010

 

Valls Martínez, M.C., Martín Cervantes, P.A., & Cruz Rambaud, S. (2020). Women on corporate boards and sustainable development in the American and European markets: Is there a limit to gender policies? Corporate Social Responsibility and Environmental Management, 27(6):2642-2656. https://doi.org/10.1002/csr.1989

 

Wagner, J., & Walstad, W.B. (2022). Gender differences in financial decision-making and behaviors in single and joint households. Journal of Economic Education, 68(1):5-23. https://doi.org/10.1177/05694345221076004

 

Weber, E.U., & Millman, R. (1997). Perceived risk attitudes: Relating risk perceptions to risky choice. Management Science, 43(2):122-143. https://doi.org/10.1287/mnsc.43.2.123

 

Weida, E.B., Phojanakong, P., Patel, F., & Chilton, M. (2020). Financial health as a measurable social determinant of health. PLoS One, 15(5):e0233359. https://doi.org/10.1371/journal.pone.0233359

 

Were, M., Odongo, M., & Israel, C. (2021). Gender Disparities in Financial Inclusion in Tanzania. WIDER Working Paper 2021/97. Helsinki: The United Nations University World Institute for Development Economics Research (UNU-WIDER). https://doi.org/10.35188/UNU-WIDER/2021/037-5

 

Yao, R., Gutter, M. S., & Hanna, S. D. (2005). The financial risk tolerance of Blacks, Hispanics and Whites. Financial Counseling and Planning, 16(1):51-62.

 

Yao, R., Gutter, M.S., & Hanna, S.D. (2011). The financial risk tolerance of Blacks, Hispanics and Whites. Financial Counseling and Planning, 12(2):65-72.

 

Yusof, S.A. (2015). Household bargaining, financial decision-making, and risk tolerance. International Journal of Business and Society, 16(2):221-240. https://doi.org/10.33736/ijbs.565.2015

 

Zaimah, R., Masud, J., Haron, S.A., Sarmila, M.S., & Awang, A.H. (2015). Financial decision making among dual-income families in Malaysia. Mediterranean Journal of Social Sciences, 6(4):70. https://doi.org/10.5901/mjss.2015.v6n4s3p70

 

Zhao, L., Rasoulinezhad, E., Sarker, T., & Taghizadeh-Hesary, F. (2023). Effects of COVID-19 on global financial markets: Evidence from qualitative research for developed and developing economies. European Journal of Development Research, 35(1):148-166. https://doi.org/10.1057/s41287-021-00494-x

Share
Back to top
International Journal of Population Studies, Electronic ISSN: 2424-8606 Print ISSN: 2424-8150, Published by AccScience Publishing