Financial literacy surveys, almost exclusively based on multiple-choice questions, have consistently found financial literacy gender gaps worldwide. At the same time, there is evidence that women perform worse than men on multiple-choice questions. This article, employing data from PISA 2015, analyzes the differential gender effect of question formats on students' financial literacy assessment. Having answers to both multiple-choice and open-response questions for each student, we employ a panel specification and use within-student variation while controlling for students' fixed characteristics. We show that girls perform worse than boys when answering multiple-choice questions, whereas such a difference is not observed for the open-response format. Moreover, we highlight how the results may be driven by question characteristics underlying the selected-response format, especially the context and cognitive process of the question, whereas no role is found for students' non-cognitive traits. Evidence suggests that our results are generalizable to settings other than the 15-years old population tested in PISA and that specific policy aimed at training individuals to the multiple-choice format may help close the observed difference.


Awarded the M. Jesús San Segundo Prize of the Spanish Economics of Education Association

Abstract: A growing body of literature shows the importance of financial literacy in affecting house- holds’ choices. Fewer studies focus on understanding the determinants of different levels of financial literacy and our paper contributes filling this gap by analyzing a specific determinant, the educational system, to explain the heterogeneity in financial literacy scores across Germany. We suggest that the lower financial literacy observed in East Germany is partially attributed to a different institutional framework experienced during the Cold War, more specifically, to the socialist educational system experienced in East Germany, which affected specific cohorts of individuals. By exploiting the unique set-up of German reunification, we identify education as a channel through which institutions and financial literacy are related in the German context. In support of this hypothesis, we find that individuals exposed to the Eastern educational system exhibit, on average, 12% to 21% lower financial literacy scores as compared to the control group.

Abstract: Using a US nationally representative sample of over 6,000 adults from 26 countries of ancestry, we find a strong association between their financial literacy in the US and the financial literacy level in their self-reported country of ancestry. More specifically, if an individual from a country of ancestry with “average” financial literacy had instead come from a country with financial literacy one-standard deviation above the mean, his or her likelihood of answering correctly basic financial literacy questions regarding inflation, risk diversification, and interest rate in the US would have increased by 4 percentage points, a 9% increase relative to the average financial literacy in our sample of 43%. The cultural components behind this observed association include a strong emphasis on patience, long-term orientation and risk-aversion in the country of ancestry. We also find that the association is driven by financial literacy on risk diversification and interest compounding.

Book Chapters:

  • Addabbo, T., Davoli, M. & Murat, G. M. (2019). Is there an immigrant-gender gap in education? An empirical investigation based on PISA data from Italy. In: Palmerio, L. and Caponera, E. (Eds.). Le indagini internazionali OCSE e IEA del 2015. Contributi di approfondimento. Roma: Franco Angeli.

  • Davoli, M. & Entorf, H. (2019). Socioeconomics inequalities and student outcomes in German schools. In: Volante, L., Schnepf, S., Jerrim, J., and Klinger, D. (Eds.). Socioeconomic Inequality and Student Outcomes: National Trends, Policies, and Practices. Springer Press.

  • Davoli, M. (2016). Scelte scolastiche degli immigrati: fattori socio-economici o di identità etnica? Un’analisi dei dati PISA 2012. In: Palmerio, L. (Eds.), PISA 2012. Contributo di approfondimento. Roma: Franco Angeli.

Working Papers:

  • Davoli, M., & Rodrigúez-Planas, N. Gender Differences in Preferences and the Gender Gap in Financial Literacy.

BBVA EduFin Grant. (Abstract available upon request)

Work in Progress:

  • Ethnic Identity and Students Outcomes.

  • Scholarships and University Student Outcomes: a Regression Discontinuity Approach.

  • Davoli, M., & Hou, J. The Gender Gap in Financial Literacy and Within Household Specialization. Received the TFI Grant