Financial independence and gender equality in the EU

Vadim Pastuh/Adobe Stock

What is the issue?

Being financially dependent on someone else can create and reinforce multiple forms of vulnerability and disadvantage. It can create an imbalanced power dynamic in relationships by restricting the freedom and agency of the financially dependent individual, rendering them vulnerable to control or abuse by their partner. Financial independence is known to be a gendered issue, with women more likely than men to be financially dependent on others.

Existing literature lacks a clear conceptual framework to understand financial independence as a multidimensional concept, and empirical analysis on this issue is hampered by data limitations.

How did we help?

The overall objective of this study for the European Institute for Gender Equality (EIGE) was to strengthen the institutional capacity to address gender inequalities in financial independence in the EU member states. The specific objectives of the study were:

To define a multidimensional concept of financial independence and to analyse gender inequalities in financial independence
To assess different methodologies, approaches and evidence on income pooling and income sharing in the household from the gender equality perspective
To analyse the existing evidence on the impact of tax systems and social protection measures on gender inequalities in financial independence across the EU member states
To analyse the existing evidence on the consequences of financial dependence for gender inequalities, in particular in relation to economic violence against women

A range of research methods were applied to meet these objectives including literature reviews, descriptive analysis, regression analysis and microsimulation modelling. To summarise gender inequalities in financial independence in the EU, the report draws on a series of indicators based on data sources including Eurostat (online database), the EU Statistics on Income and Living Conditions (EU-SILC), the World Bank Global Findex Database, the European Social Survey (ESS) and the Eurobarometer.

What did we find?

The key findings of the study were:

Financial independence has tended to be defined in narrow terms, focusing on earnings and income within the context of male-female partner relationships.
Gender inequalities in pay, earnings and income are entrenched and enduring, with gender gaps consistently to the detriment of women.
Women are consistently disadvantaged compared to men in relation to wealth, particularly financial assets and business wealth.
Data limitations make it more difficult to estimate gender inequalities in relation to certain aspects of financial independence with precision.
Tax-benefit systems in EU Member States reduce gender inequalities in financial independence, but largely for the working age population.
Consequences associated with financial dependence are wide-ranging and financial dependence has been linked to economic and other forms of violence.

What can be done?

The study made a series of policy recommendations at the EU and Member State levels. The key recommendations were to:

Establish a definition of financial independence and a corresponding measurement framework to guide policymakers and support monitoring of gender equality policy objectives.
Improve the availability of harmonised data to enhance understanding of gender inequalities in financial independence in EU Member States.
Ensure that tax-benefit systems do not undermine work incentives for secondary earners.
Address gender inequalities in care and remove barriers to accessing care services.
Take steps to address gender gaps in income over the life course.
Invest in education and training focused on promoting financial knowledge and skills.