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> Posted by Dr. Susan Johnson, Senior Lecturer in International Development, University of Bath

Recent research has given us much better data on the difference in access to formal financial services between men and women. The figure below gives these gaps by region based on the Global Findex dataset. With this evidence for the gender gap, what we really want to know is: what is it about being a woman or man that creates the gap? That is, are these gaps the result of factors such as women having less education, lower incomes, and being less likely to have formal employment? Or do they arise from legal factors such as property rights, inheritance rights, gender norms about autonomy, mobility, etc.? Or, perhaps women behave inherently differently and are more risk averse. Or does being a woman matter for another reason, even when all these factors are taken into account? If it does, then we might need to look further for other sources of discrimination in the market. These might include the behaviour of the financial institutions themselves.

It is possible to use specialist techniques to find out whether gender matters when other variables, such as education and income, are controlled for. If the gender variable (also called the gender dummy as it is a variable in the equation that only takes a value of one for a woman or zero for a man) is statistically significant when all of these factors are included then it suggests that there is still an aspect of gender at work that the other variables have not accounted for. Recently economists have been using these techniques on data sets about access to financial services to find out whether being female matters for access. But, here’s the rub. We seem to be getting rather different results.

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