The gender gap in earnings is a persisting societal challenge: women earn less in the labor market than men. But earnings are not the only economic resources individuals rely on. Over the last two decades increasing attention is being paid to wealth as a separate major component of how people are doing economically. Wealth refers to the value of possessions, such as homes, money in the bank, savings, stocks, and businesses, minus any money owed on these assets, such as mortgages and loans. To provide a complete picture of gender differences in economic resources, we should therefore also ask the question: is there a gender gap in wealth? 

Answering this question is not straightforward. Differences in access to wealth can arise because men live in wealthier households than women, or because men have more control over a household’s wealth than women. In this article, we look at the former and answer the more specific question: do men live in wealthier households than women? This implies that our results only capture part of possible gender differences in wealth because an important part of gender differences exists inside households rather than between households. 

So far, relatively little attention has been paid to the question of whether men live in wealthier households than women. In traditional contexts, the majority of women married men at young ages and stayed married throughout their lifetime. This implied that most men and women shared the same households and that men were unlikely to live in wealthier households than women. Today, people are single for larger parts of their lives because of a variety of demographic processes including increases in divorce and separation. It is among single persons that gender differences in household wealth are likely to become more visible. Does this mean that men live in wealthier households than women today? 

Figure 1 shows what the gender gap in household wealth looks like in a selection of countries for adults aged 35 or more. Household wealth is the net value of assets of all household members combined and is therefore an indicator of how rich a household is as a unit. Across countries, men indeed live in wealthier households than women. Interestingly, the only exception to this conclusion is Spain, where practically no gender gap in household wealth appears to exist. That the situation in Spain is better than in other countries could be good news, but it does not necessarily mean that women and men have equal access to wealth because we cannot look at the access that women have to the wealth of their households. 

The magenta bars in figure 1 show gender differences in per capita household wealth: the amount of wealth available per adult person in the household. We see that differences in the size of households can explain a large share of gender differences in household wealth in Austria, Germany, Finland and Slovakia. Hence, the relatively favorable position of Spain exists because women are more likely to live in the same type of households as men than in other countries. With demographic change, including increases in singlehood and separation, it is possible that a gender gap in household wealth will also emerge in Spain in the future. 

Hence, men in Spain do not live in wealthier households than women overall, but this might not be the case for specific groups, such as older people. Older persons often no longer have a partner, implying that large numbers of people live alone. If men have more wealth than women, this might not translate into a gender gap in household wealth during ages at which most people are partnered, but when this ceases to be the case (i.e. during old age) gender differences in wealth could become more clearly visible. 

Figure 2 shows what the gender gap in wealth looks like among individuals aged 65 or more. The dark blue bars show differences in total household wealth. In this comparison, Spain is more similar to other countries: men live in households that have 36,000 euros more wealth than the households that women live in. The main reason is that men are more likely to still live with a partner than women during old age. This becomes visible once we consider per capita wealth, displayed in the light blue bars of figure 2. 

In short, there is a gender gap in wealth among older individuals in Spain because older women are more likely to live alone. This gender gap disappears once we consider per capita wealth. It might appear fair to divide household wealth by the number of household members to compare the economic situation across households, but there is no scientific consensus on whether and how this should be done in the case of wealth. There are at least two reasons why the small per capita gender gap in wealth might paint an over-optimistic picture. 

Firstly, one of the functions of wealth is that it provides a safety net in the case of unfortunate events such as a sudden drop in income or unexpected costs. Sharing your wealth with other household members creates a larger pool of resources that can be used as a safety net. Research on income often uses a specific formula to account for the number of household members who share an income but also for the cost reductions related to sharing a household (such as paying rent together). The brown bars of figure 2 above show gender differences in such “equivalized” wealth. We see that older women have almost 16,000 euros less equivalized wealth than older men, confirming that they are at an economic disadvantage as compared to men.

To illustrate this further, figure 3 shows the share of men and women living in households with a given total level of household wealth in the first two bars of the graph. In the last two bars of the graph, we see the results using the above-mentioned equivalized wealth, which takes into account the number of household members. Older women are more likely than men to live in households that are very vulnerable in terms of wealth. For instance, 9.6% of women above age 65 live in households with less than 10,000 euros of available wealth as compared to 6.8% of men above age 65. 

A second reason why the gender gap in per capita wealth might paint an overly optimistic picture is that not all forms of wealth are equally available in times of need. The great majority of household wealth is held in the form of homes. Before households can use that wealth to cover expenses, the house has to be sold or a so-called reverse mortgage has to be contracted to access part of the home’s value. This takes time and few households are willing to do so, especially among older individuals for whom accumulated social networks related to their residence is important. Other forms of wealth are generally more easily accessible, such as money in the bank or money held in the form of stocks. 

Figure 4 shows how many individuals live in households with very limited financial wealth, which is all wealth that is not held in the form of houses, cars, durables or other real assets. In 2017, 25% of men above age 65 had less than 2,000 euros of financial wealth, compared with 31% of women above age 65. 
 

Compared to other countries, gender differences in wealth are relatively small in Spain. This is good news, but there are some reasons to avoid overoptimism. Firstly, women could have less access to wealth within households than men, something we were unable to look at. Secondly, there is a gender gap in wealth among individuals aged 65 or more. Because older women are more likely to be single they are at a higher risk of living in households with very low levels of wealth and low levels of financial wealth in particular. This can have notable consequences for older women because wealth is arguably most important for financial well-being at older ages. As earnings from employment drop at retirement, older people start consuming the wealth that has been accumulated during their lives. It is also likely that gender differences become more salient as cohorts that were more likely to experience separation and who spend large parts of their adulthood single start to retire. In this respect, enabling women to accumulate wealth (i.e. by reducing the gender earnings gap) is an important strategy to prevent wider gender gaps in wealth from emerging in the future. 

BARCELÓ, C., L. CRESPO, S. GARCÍA-URIBE, C. GENTO, M. GÓMEZ and A. DE QUINTO (2020): The Spanish Survey of Household Finances (EFF): description and methods of the 2017 wave, Documentos Ocasionales 2033, Banco de España. 

GRABKA, M. M., J. MARCUS and E. SIERMINSKA (2015): «Wealth Distribution within Couples», Review of Economics of the Household, 13(3), 459-486.

SIERMINSKA, E. M., J. R. FRICK and M. M. GRABKA (2010): «Examining the gender wealth gap», Oxford Economic Papers, 62(4), 669-690.