Gender, financial literacy and stock market participation: An experience with university and college teachers

Welfare loss resulting from non-participation in stock market can be huge, especially when governments are withdrawing from welfare programmes. Women typically participate less than men in the stock market, while also scoring lower on financial literacy. We explore the linkage between the gender gap in stock market participation and financial literacy while controlling for two major externalities of education level and wealth. Using a survey data of university and college teachers in the district of Ludhiana, we found that female teachers participate less in stock market to an extent of 16.7 percent as compared to their male counterparts. This difference was not due to the basic financial literacy but a significantly lower advanced financial literacy and risk appetite among female teachers. Our results corroborate the view that non-participation in stock markets is a common response to deficiencies in advanced financial literacy and lack of risk attitudes.