The Power of a Financially Literate Woman in Intra-Household Financial Decision-Making

Using India's national benchmark survey for financial literacy and inclusion, we observe a step change in financially literate women, who possess higher levels of sole and joint responsibility with their spouse to manage their households' finances. Considering ownership information in eighteen different financial products, alternative investments (such as gold, property) and informal banking (such as savings at home, loans from moneylenders), we find that household product holdings are greatest where the husband and wife are jointly responsible for financial decision-making, and in particular where the wife is financially literate. Such households benefit from men's preference for higher risk-return products, whilst also holding security-focused products, such as savings and insurance products, favored by women. The findings emphasize the importance of financial literacy and spousal teamwork in intra-household financial decision-making