The Gender Wealth Gap in the United States

Background/Purpose: In the US, the ratio of female to male median earnings is at a record high 80.5%.  Studies suggest women and men will reach earnings parity in 2059.  However, earnings and income are likely not the only financial resource in which there are gender disparities. Despite a decreasing gap in wages by gender, preliminary research indicates that the gap in wealth by gender in the U.S. not only remains substantial but is on the rise. Chang (2010) theorizes this is a result of men’s greater access to mechanisms, which allow them to convert income to wealth and women’s greater likelihood of receiving subprime loans, subprime mortgages, having higher levels of student debt, and higher levels of consumer or credit card debt. The latter of which is particularly true among women of color.

Research on the gender wealth gap in the US is limited. This is a critical oversight as net worth (assets less liabilities) provides insight into financial wellbeing that is not captured by income alone. The research that is available has primarily focused on unmarried households.  This is chiefly a result of data availability. The vast majority of surveys which measure wealth ask the head of household to report household level assets and liabilities.  Among married couples, this eliminates researchers’ ability to differentiate between the wealth owned by each spouse individually. As a result, researchers have typically chosen to analyze the gap between female-headed and male-headed households or among exclusively single-headed households. This paper will address this gap in literature by providing the first comprehensive examination of the gender wealth gap in the US.

Methods: This paper utilizes data from the 2008 Panel of the Survey of Income and Program Participation (SIPP).  SIPP is a population-based sample of 52,000 household in which all members 15 years or older are interviewed.  As a result, assets and liabilities can be measured at an individual level among married and unmarried households. Analyses begin by descriptively examining net worth by gender and marital status. Additional figures are constructed, separately analyzing the gender wealth gap by race and age group. Linear OLS regressions are also conducted controlling for all labor market and socio-demographic characteristics.

Results: Descriptive results find that women own $0.94 in wealth for each dollar owned by men.  Results differ drastically by marital status.  Multivariate results surprisingly find the gender wealth gap increases substantially after including control variables. Multivariate results indicate that divorced and never married women own less than $0.30 of wealth for each dollar owned by comparable men while married women own $0.92 for each dollar owned by married men.  Lastly, black women experience a substantially larger gender wealth gap. 

Conclusions and Implications:  Results finds that the gender wealth gap in the US is smaller than estimated in previous research due to the exclusion married individuals. Nevertheless the gap remains statistically significant.  In order to effectively address economic inequality by gender, results suggest that wealth must be more thoroughly considered.