Page 110 - IJPS-11-2

International Journal of
Population Studies Do female-headed households have poorer finances?

women are effectively securing their household’s financial 2021; Smith et al., 2010; Wagner & Walstad, 2022; Zaimah
stability, which contributes significantly to their overall et al., 2015). Research indicates that men are generally
financial health. more involved in household financial decision-making,
Third, female-headed households possess more financial which allows them to gain more financial knowledge
investment products. Since financial access is usually and experience, subsequently enhancing their financial
measured by the types of financial products a household literacy. On the other hand, women tend to focus more
possesses (Despard et al., 2020; Chen & Sun, 2023), this on managing daily household consumption and other
indicates that their financial access is not inferior to that family-related responsibilities (Booysen & Guvuriro, 2021;
of male-headed households. While this finding includes Zaimah et al., 2015). This division of labor may lead to
a 90% confidence interval, it remains statistically robust women being less proficient in financial matters compared
across multiple propensity score matching. Financial to men (Gudjonsson et al., 2022).
investment products represent a crucial dimension of The financial participation of female household
financial access. Female-headed households’ broader range heads, particularly in the household’s financial decision-
of financial investment products suggests that women may making process, enhances their overall financial literacy
not face inferior financial access compared to men. This and consequently improves their financial performance.
finding contrasts with existing literature that typically Policymakers should promote women’s participation
indicates women have less access to financial resources in financial activities and access to financial resources
than men (Cavalluzzo et al., 2002; Kairiza et al., 2017; through targeted policies, such as anti-poverty initiatives
Muravyev et al., 2009; Morsy, 2020; Were et al., 2021). The and microcredit programs for female entrepreneurship.
study highlights the importance of considering whether Moreover, since women often manage daily household
women serve as the financial decision-makers in their finances and tend to outperform in this area, household
households, which might account for these findings. This finance-related policies and programs (such as asset-
underscores the need for further research on the impact of building policies, Children’s Development Accounts) may
household financial decision-making on gender differences be more effective when aimed at women. Empowering
in financial access. women in financial decision-making within the household
Given the findings, we considered why female household through social activities will not only enhance women’s
heads exhibit better financial health than male household status within the household and promote gender equality
heads, even after controlling for financial literacy and in broader society but also contribute to improving the
educational attainment. This study proposes two potential financial health of households.
explanations. First, the measurement of financial literacy Several limitations of the study should be
in the data used for the study may not fully reflect actual acknowledged. First, the cross-sectional nature of the data
financial literacy. The measurement combined self-ratings restricts the ability to infer causality between the gender
of financial attention with tests of objective financial of the household head and financial health outcomes.
knowledge. The tests of financial objective knowledge Longitudinal studies would be more effective in establishing
included understanding concepts such as compound causal relationships and understanding the dynamics over
interest and the effects of inflation. This composite time. Second, the study focuses on female household
approach, widely commonly accepted by economists as a heads as financial decision-makers, which might not be
scientific measure of financial literacy (Allgood & Walstad,
2012; Behrman et al., 2012), may not fully capture the true representative of the general female population. This could
essence of financial literacy. It primarily focuses on basic limit the generalizability of the findings to all women. In
financial concepts, which may overlook more nuanced addition, cultural and regional differences within China
aspects such as practical application and adaptive financial may influence financial behaviors and access to resources,
decision-making in real-world contexts (Fernandes et al., which were not fully accounted for in this study.
2014; Kaiser & Menkhoff, 2017). Second, participation 5. Conclusion
in financial decision-making could enhance women’s
actual financial literacy. Unlike studies focusing on the The findings of this study challenge the prevalent belief
general female population, this research involves female that women have poorer financial health compared to
household heads who actively engage in financial decisions men. The analysis reveals that female-headed households
within their families. This active involvement may explain in China exhibit better income-expenditure balance, are
their better financial performance. Household financial more likely to possess commercial insurance, and show a
decision-making appears to improve individuals’ financial higher propensity to own financial investment products
literacy (Barber & Odean, 2001; Booysen & Guvuriro, than male-headed households. These results indicate that

Volume 11 Issue 2 (2025) 104 https://doi.org/10.36922/ijps.4403