What is good for the goose is good for the gander?: How gender-specific conceptual frames affect financial participation and decision-making

https://doi.org/10.1016/j.econedurev.2019.101952Get rights and content

Highlights

  • In a field experiment, we ask elementary school children to complete a standard MPL task.

  • We compare the effects of two treatments aimed to boost the childrens attention span on the task.

  • Treatment 1 introduces the task through gender-specific conceptual frames.

  • Treatment 2 exposes the children to a workshop on the utility of savings.

  • The use of gender-specific frames improves girls performance and boosts the workshops efficacy.

Abstract

We conduct a field experiment with elementary school children to go to the roots of the gender gap in financial participation and decision-making. We study the combined effects of two treatments designed to boost the attention span of participants in completing a basic financial task. We find that the use of gender-specific conceptual frames (competitiveness vs. cooperation) in the description of the task: a) raises girls’ interest and thus increases their number of coherent answers; b) makes the transmission of information on the utility of savings more effective in boosting the coherence of girls’ answers; c) does not increase girls’ level of impatience. This evidence supports our underlying hypothesis that the use of more gender-specific conceptual frames in presenting financial information to women may play a role in narrowing the gender gap in financial market participation and decision-making.

Introduction

The gender gap in financial participation and decision-making has been extensively documented in the economics, psychology and sociology literature. For instance, it has been demonstrated that women are rarely primary decision-makers when it comes to savings and investment decisions. Fonseca, Mullen, Zamarro, and Zissimopoulos (2012) find that, when talking about making long-term spending and saving plans, 26.2% of women versus 33.8% of men declare that they are the primary decision-makers in their households. Similarly, when talking about tracking investments and insurance coverage, these percentages are 32.8% versus 49.2%. A number of studies highlight some potential determinants of this phenomenon (see Lusardi and Mitchell (2014) for an exhaustive overview). First of all, women are, on average, more risk-averse than men (Kahneman and Tversky (1979); Eckel and Grossman (2002), Eckel and Grossman (2008); Niederle and Vesterlund (2007); Croson and Gneezy (2009); Dohmen et al. (2011)). Second, women are on average less financially literate as well as less confident in their own capabilities than men. Evidence that women have lower scores on financial literacy tests than men is found in Lusardi and Mitchell (2008), Guiso, Monte, Sapienza, and Zingales (2008), Fornero and Monticone (2011), van den Assem, van Dolder, and Thaler (2011) and Bucher-Koenen, Lusardi, Alessie, and van Rooij (2017), whereas evidence of a gender gap in measured and self-assessed financial literacy is found in Barber and Odean (2001), Eckel and Grossman (2002), van Rooij, Kool, and Prast (2007), Arano and Terry (2010), and Mahdavi and Horton (2014).1 Third, social roles, cultural norms and/or specialization processes inside the family may prevent women from engaging in financial activities (Fonseca et al., 2012; Bucher-Koenen et al., 2017). Finally, Boggio, Fornero, Prast, and Sanders (2018) point out how the language of investor communication, by privileging masculine linguistic domains, may generate in women feelings of unfamiliarity towards this type of specialized discourse (see Gotti (2003), Gotti (2011), for a definition of specialized discourse and an analysis of the features of technical as opposed to common language).

By elaborating on the last point, this article investigates whether gender-specific conceptual frames impact on the level of attention that women and men devote to the completion of a basic financial task aimed at eliciting their time preferences. Limited attention is a well-known behavioral bias that undermines the quality of investors’ decisions (Kahneman, 1973, Corwin, Coughenour, 2008, Dellavigna, Pollet, 2009). The present study verifies whether limited attention correlates with the framing of the problem at hand and with the respondents’ gender. In particular, we investigate whether the use of gender-specific conceptual frames may spark people’s interest in the task they are required to perform, make them focus more on its completion, and improve the consistency of their answers. The task consists in filling out a multiple price list aimed at eliciting individual discount rates (see Coller & Williams, 1999 and Harrison, Lau, & Williams, 2002 for the basic design and first applications). We choose such a task for a number of reasons. First, it allows to clearly tell apart those who provide coherent answers from those who do not. Second, the relation between intertemporal preferences and interest rates as embedded in a multiple price list task is at the core of basic financial knowledge and it is well-known that the latter correlates positively with financial participation (Guiso, Jappelli, 2005, van den Assem, van Dolder, Thaler, 2011). Third, the quality of financial decisions depends heavily on the characteristics of agents’ underlying time preferences. If individuals display inconsistent time preferences or fail to elicit them correctly through introspection, they are more likely to incur in bad investment decisions and consequently further limit their participation in financial markets. Indeed, Meier and Sprenger (2013) show that time preferences are highly correlated with financial information acquisition and financial participation. They also use a multiple price list task and report that less patient individuals, and to some extent also those who display incoherent time preferences, are less likely to participate to financial education programs and financial markets. Similarly, Jacobson and Petrie (2009) show that inconsistent choices and mistakes correlate with suboptimal behavior in financial decisions.

We run a field experiment aimed at eliciting participants’ discount rates and propensity to save. The experiment targets a sample of third and fourth graders (aged 8 and 9) from five different elementary schools in the metropolitan area of Turin, Italy. Why do we target young children? The main reason is that they have been much less exposed than adults to socio-cultural conditioning factors potentially determining the gender gap in financial participation.2 To be more specific, the choice of age group was dictated by our ambition to go to the roots of the gender gap by minimizing all the potential determinants deriving from socialization, the process by which human infants begin to acquire the skills necessary to perform as functioning members of society (Billingham, 2007, Burusic, Babarovic, Serie, 2012). Inasmuch as socialization is the process through which human beings learn and come to understand the norms and expectations that serve as organizing devices in society, it is also a mean of constructing (stereo)typical social roles with specific capabilities and dispositions, including economic and financial ones.

We use a frame analysis approach to reinforce the theory that during the process of socialization human beings learn to give meaning to reality according to a set of conceptual frames (Goffman, 1974). These conceptual frames are not intentional and originate in daily routines and customs without an awareness that they are such, and that they could have been different (Verloo & Lombardo, 2007). In other words, they are what Gadamer (1975) defines “prejudices”, that is socially constructed cultural filters through which human beings become aware of, understand and interpret reality. Thus it is through conceptual frames that we perceive certain activities, tasks and responsibilities as male or female (see Niederle & Vesterlund, 2007 for a discussion of the factors that lead parents, teachers and peers to encourage gender-typed activities in children). Moreover, since language is of fundamental importance in children becoming competent members of society, conceptual frames are produced and reproduced through discursive practices (Fairclough, 1992).

In the experiment, we study the (combined) effects of two different treatments designed to boost the attention span of participants and henceforth referred to as the “Framing Treatment” and the “Workshop Treatment”. The first treatment (the Framing Treatment) is based on economic, psychological and linguistic studies that rely on “framing theory” (e.g. Goffman, 1974, Tversky, Kahneman, 1981, Tannen, 1993; Lakoff, 1987; Fillmore & Baker, 2009) and is characterized by its intuitiveness and gender-specificity. The treatment exerts leverage on an instinctive reaction in that it arouses the interest of participants by suggesting some possible uses for the prizes (colorful balloons) that they may win by completing a certain task.3 More specifically, we exploit the well-documented (stereo)typical conceptual dichotomy of competitive men and cooperative women (Akerlof, Kranton, 2000, Niederle, Vesterlund, 2007, Eckert, McConnell-Ginet, 2013, Buser, Niederle, Oosterbeek, 2014). Evolutionary psychologists and experimental economists have both demonstrated that, from an early age, boys spend more time at competitive games than girls, whereas girls often select games that have no clear end point or no winner (Niederle, Vesterlund, 2007, Buser, Niederle, Oosterbeek, 2014, Niederle, 2014). This means that these two opposite conceptual frames, i.e. competitive men vs. cooperative women, come into play in the process of socialization at an early stage. In line with this hypothesis, we ask the children to complete a standard task aimed at eliciting their time preferences (see Bettinger, Slonim, 2007, Andersen, Harrison, Lau, Rutström, 2008, Castillo, Ferraro, Jordan, Petrie, 2011, Sutter, Kocher, Ruetzler, Trautmann, 2013, Alan, Ertac, 2018). The task instructions are not difficult to understand – third and fourth graders already have enough cognitive abilities to comprehend them – but the task requires them to concentrate long enough to provide answers that are consistent (i.e., non-contradictory). To possibly impact on the children’s attentiveness in completing it, we use three alternative conceptual frames. The first focuses on competitiveness and physical abilities, thus emphasizing (stereo)typical masculine characteristics. The second focuses on cooperation and empathy, thus emphasizing (stereo)typical feminine characteristics. The third is neutral, and uses no gender-specific connotation. Most importantly, in our experiment framing does not affect the description of the task per se, but rather the description of its outcome. On this, we elaborate on the insights of Becker & Mulligan (1997) who state that inducing people to think about the utility that derives from future consumption encourages them to become more patient, and Zhao, Hoeffler, and Zauberman (2007) who instead demonstrate that mentally simulating the future outcome improves the consistency of agents’ preferences.

The second treatment (the Workshop Treatment) consists in exposing participants to a one-hour workshop on the utility of saving. The workshop attracts the children’s attention through a set of recreational and educational activities aimed at inducing them to think about the benefits of saving more carefully (we discuss the structure of the workshop in more details in Section 2).

In a related paper, Coda Moscarola and Migheli (2017) use the same Workshop Treatment (in isolation) to evaluate whether educational activities of this kind are effective in improving the consistency of children’s answers and their level of patience. They show that attending the workshop contributes to increase the number of consistent answers of boys but had no significant effects on girls.4 These results point to the existence of some gender differences in the way boys and girls approach and understand simple educational activities of financial literacy. These differences can in turn contribute to create and amplify the diverging patterns that men and women display in terms of financial participation and decision-making. This led us to investigate whether gender-specific conceptual frames impact on the level of attention that children devote to financial literacy activities, and thus ultimately affect their performance and willingness to get engaged. Therefore, we combine the Framing Treatment and the Workshop Treatment to study the intertwined effects of framing and learning.

Overall, we find that the use of gender-specific conceptual frames: a) raises girls’ interest and thus increases their number of consistent answers; b) makes the workshop on the utility of saving more effective in boosting the consistency of the answers, once again in particular for girls; and c) does not increase girls’ level of impatience. Although our experiment targets elementary school children, we believe the results are relevant also for the adult population. Our aim is to go to the roots of the gender gap in financial participation and decision-making: we show that gender-specific conceptual frames influence the quality of financial decisions even for those who have been much less exposed to socio-cultural conditioning factors. The effects of these factors pile up over time and are likely to lead to long-term consequences. In fact, the literature on long-lasting effects of early life exposures and interventions (see for instance Heckman & Karapakula, 2019 and Eisner, Ribeaud, Sorrenti, & Zölitz, 2019) testifies the lifetime relevance of socio-emotional skills, attitudes and beliefs that one acquires during childhood. Focusing on financial participation, Lusardi et al. (2010) and Grohmann, Kouwenberg, and Menkhoff (2015) show that individuals general attitude towards financial issues is shaped by their childhood experiences. Therefore, and although it is certainly true that financial preferences change with age, the interest that an individual has for these issues or the way he/she approaches financial decisions is much more constant. This suggests that the use of a more gender-specific conceptual frame – one women can identify more with – in presenting financial information can indeed play a role in narrowing the gender gap in financial market participation and decision-making. van Rooij, Lusardi, and Alessie (2011) show in fact that those who have low financial literacy are significantly less likely to participate to financial markets. Thus, as gender-specific conceptual frames influence women’s level of attention and the quality of their choices, they will also impact on their level of participation.

The remaining part of the article is structured as follows. In Section 2, we present our experimental design. In Section 3, we show the descriptive statistics of our sample. In Section 4, we present our empirical strategy. We illustrate and interpret the results in Section 5, and conclude in Section 6.

Section snippets

Experimental design

The experiment involves 251 children from grade 3 and grade 4 (aged 8 and 9) belonging to 12 different classes from 5 different elementary schools located in the metropolitan area of Turin (Italy).5

Descriptive statistics

As mentioned above, 251 children took part in the experiment. Since each child repeated the Framing Treatment twice, our balanced sample thus consists of 502 observations. Table 2 gives the descriptive statistics of the sample.13

Empirical strategy

We are interested in studying the (combined) effects of the Framing Treatment and the Workshop Treatment on the level of consistency in the children’s answers. To elicit the framing effect, we exploit the heterogeneity in the participants’ answers across the three different conceptual frames, masculine, feminine, and neutral (the latter is our control group). To elicit the effect of the workshop, we analyze the variation that individual answers display over time, exploiting the fact that about

Results

Table 8 presents the estimation results of the Logit specification for the determinants of the level of consistency of children’s answers. In each column, we use a different set of explanatory variables and report the marginal effects.

The results show that the Workshop Treatment has a positive effect on the level of consistency of the children’s answers. After the children have attended the workshop the probability that they provide a consistent set of answers rises by 20 percentage points (see

Conclusions

We provide field evidence on the effect of gender-specific conceptual frames on people’s level of attention and quality of choices. Thaler and Sunstein (2009) demonstrate that the way of presenting the potential utility of a task can serve as a “nudge” that alters people’s behavior in the desired way, without precluding any option or changing significantly the economic incentives embedded in the choice. In line with this view, we conjecture that a more gender-specific approach in framing

CRediT authorship contribution statement

Cecilia Boggio: Conceptualization, Methodology, Writing - original draft, Writing - review & editing. Flavia Coda Moscarola: Conceptualization, Methodology, Formal analysis, Writing - original draft. Andrea Gallice: Methodology, Formal analysis, Writing - review & editing.

Acknowlgedgments

This research is part of the project Conta e Racconta promoted and supported by the Fondazione per la Scuola - Compagnia di San Paolo in collaboration with the Museo del Risparmio di Torino (Italy). We are particularly thankful to Nicola Crepax and Elisabetta De Martino of the Fondazione per la Scuola and to Paola Laiolo and Giovanna Paladino of the Museo del Risparmio who provided organizational support and useful advice. We also thank Alessandra Foresta for excellent research assistance and

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