Study shows disparity in perceptionsof and response to economic situation between women and men

The consumer surveyscarried out since 2006 by Fundação Getulio Vargas’ Brazilian Institute of Economics (FGV IBRE) generate confidence results and other economic trend indicators, broken down by sociodemographic characteristics, including gender.

When we analyze the behavior of the confidence index by gender over the years, we see a gap between women’s and men’s confidence since late 2015. When economic activity is recovering, women’s confidence tends to be lower than that of men. This behavior can be observed as of the end of 2015, when the Brazilian economy began to recover the confidence that was lost during the 2014-2016 recession; and after the drop in confidence during the pandemic in 2020. This trend suggests the existence of gender differences in the way men and women respond to periods of economic uncertainty and recovery in activity. This may be attributed to a combination of socioeconomic factors, such as differences in pay and family responsibilities, divergent perceptions of risk, and social and cultural expectations regarding the role of women in the economy.

Looking at the most recent full-year data, for 2023, women’s confidence was higher than men’s for 10 months in a row (between February and November 2023) – something that had only happened before in 2006, when women’s confidence was higher than men’s for 16 consecutive months. To get a more in-depth understanding of this result, it would be necessary to wait for the next data to determine whether a structural change has actually occurred, resulting in women’s confidence being higher than men’s, or whether this was just a temporary fluctuation. The data for 2024 already suggests the latter, with the female consumer confidence result once again being lower than the male one.

Out of the indicators that make up the confidence index, the one that gauges perceptions of the current situation tends to be higher among women than among men most of the time, while the indicator measuring expectations for the coming months shows men to be more optimistic than women. It is worth mentioning that in the non-standardized data, the gender difference for these indicators tends to be much higher, and this result is in line with international studies. For example, the current financial situation indicator suggests that women have a much more unfavorable view of their current finances, as on average they tend to score 15 points lower than men. Again, this result may suggest how women and men respond to, observe and participate in the economy.

Another interesting result is the difference in responses regarding consumers’ financial situation. Historically, more women than men have said they have been “getting into debt,” as can be seen in Graph 2. On average, between 2009 and 2024, 10.5% of women were running up debts, compared to 7.0% of men – a difference of 3.5 percentage points. In February 2024, the latest period for which data is available, this difference widened to 4.4 percentage points, with 11.2% of women saying they were getting into debt, compared to 6.8% of men.

This difference in responses about consumers’ financial situation, with a higher proportion of women reporting being in debt than men, again suggests gender disparities, in this case related to financial health and management of personal finances. This difference may be explained by a variety of factors, including differences in consumption patterns, financial responsibilities and income opportunities between men and women. Women may face additional challenges, such as lower pay and higher family care costs, which may contribute to a higher incidence of indebtedness.

Furthermore, it is worth mentioning that since July 2022, the percentage of women signaling that they were getting into debt has been above the long-term average, with the exception of two months. In other words, since mid-2022, in 90% of the months there has been a higher percentage of women indicating that they were taking on debt than the long-term average. Among men, on the other hand, during the same period, the picture was more balanced, with fewer men running up debts than the long-term average in 55% of the months.

This recent result once again confirms the differences between women and men when it comes to the economy, although the pandemic may also have had an influence. With children at home due to social distancing measures, women faced an even greater burden of domestic responsibilities at a time when many lost their jobs. When the economy starts to recover, it can take women longer to return to the job market, either because of gender discrimination or because they are already somewhat behind in terms of technology skills. In addition, during this period, inflation was high, and this may have hit women harder, given the persistence of the gender pay gap. This context, exacerbated by the pandemic, may have contributed to the increase in women’s indebtedness and to the differences observed between men and women in the economy, as evidencedby recent data.

Additionally, the number of female heads of household has increased, putting more women in a position of financial independence while also giving them greater financial responsibilities. In the case of single mothers, these responsibilities have to be borne alone. Although this financial independence represents a significant advance for women, it may also contribute to increased financial pressure and indebtedness, especially when combined with gender pay differences and difficulties in accessing income opportunities equal to those of men.

Another indicator that signals differences in how women and men participate in and perceive the economy is inflation expectations. Historically, women have had higher expectations for prices and in recent months this difference has intensified. In February 2024, women predicted that inflation one year ahead would be 7.1%, on average, while men forecast 5.8% – a difference of 1.3 percentage points.

Once again, these results reflect income disparities and historical experiences of gender inequality. Additional challenges in the labor market, including lower wages and more limited career opportunities, may lead to greater sensitivity to financial pressures and price increases among women. Such factors seem to shape individual economic perceptions, suggesting that women tend to have more sensitive perceptions of prices, exacerbated by different financial responsibilities, such as household shopping and caring for the family. This supports a more pessimistic and cautious inflation forecast among women.

In short, analysis of the data reveals a series of gender disparities in perceptionsof and responses to the economic context. From differences in confidence between men and women to inflation expectations and the management of personal finances, there is a clear influence of historical experiences of gender inequality and socioeconomic disparities in the way men and women take part in the economy. These results highlight the importance of considering gender dimensions in the formulation of economic and social policies, with a view to mitigating inequalities and promoting a more equitable and inclusive participation of both genders in economic development.

To find out more, visit FGV IBRE’s website.