How to Combat Gender Inequality in Financial Independence?

Despite notable advances, gender inequality in financial independence remains a substantial barrier to true gender equality in the EU. The European Institute for Gender Equality (EIGE) has identified significant disparities in income, wealth, and financial power between men and women, with financial independence often out of reach for many women. This inequality impacts their decision-making autonomy, economic stability, and vulnerability to economic violence.

We checked the report to see what core issues were identified and what policy solutions should be applied.

Key Issues Regarding Gender Inequality in Financial Independence

Gender inequality in financial independence persists as a complex issue impacting women’s economic security, decision-making power, and overall autonomy. In the European Union, large gaps remain in income, wealth accumulation, and financial decision-making authority, all of which limit women’s ability to achieve true economic independence.

This imbalance is exacerbated by systemic barriers, such as unequal pay, limited wealth-building opportunities, and biases in access to financial services. Additionally, many women are more vulnerable to economic violence, often trapped in financial dependency that restricts their freedom.

The report identified 4 key issues:

  1. Persistent Income Gaps
    Women in the EU face notable income disparities compared to men, with the gender pay gap remaining at 12.7% as of 2021. The broader earnings gap, considering working hours and employment rates, is even larger at 36.2%, largely affecting women’s long-term economic security, including pensions where a 26% gap exists. Additionally, a significant proportion of women in partnerships earn less than their partners, which reduces their bargaining power and decision-making influence within households.
  2. Wealth Disparities
    Data shows that women’s wealth in the EU averages only 62% of men’s, with disparities expanding in households with children and increasing with age. Women are often more financially responsible for day-to-day expenses and less involved in strategic financial decisions. This limits women’s access to wealth-generating assets, such as stocks and business ownership, where they face additional biases in financial service accessibility.
  3. Financial Dependence and Economic Violence
    Economic dependence makes women particularly susceptible to economic violence, where partners exert control over financial resources. Around 12% of EU women report experiencing financial control or sabotage by partners, and coercive debt can obstruct their access to future financial independence, even after separation.
  4. Data Limitations
    Accurate assessment of gender-based economic disparities is hindered by limited data on individual-level income, wealth, and expenses. Many existing metrics assume equal income pooling within households, underestimating the poverty and deprivation risk among women.

Proposed Solutions to Combat Gender Inequality in Financial Independence

The report offers 5 specific policy solutions to tackle this problem that prevents women in securing financial independence:

  1. Defining and Measuring Financial Independence
    EIGE recommends a multidimensional framework that measures financial independence beyond income, incorporating wealth, power, and control. Establishing standard indicators across EU Member States, along with routine, disaggregated data collection, can illuminate the depth of gender disparities and inform targeted policies.
  2. Gender-Sensitive Tax and Benefit Reforms
    Adjustments to EU tax and benefit systems can promote financial independence, especially for secondary earners (primarily women) often discouraged from employment due to childcare costs and joint taxation structures. Reforms focusing on income redistribution, like strengthening social transfers and creating incentives for secondary earners, would provide women more access to financial autonomy.
  3. Increasing Financial Literacy and Entrepreneurship Support
    Boosting financial literacy across demographics can help bridge the wealth gap. Programs targeting women, especially in fields like investing and entrepreneurship, can equip them with skills to navigate financial systems effectively. Encouraging more women in business and self-employment through public-private partnerships and favorable credit terms is also essential.
  4. Addressing Gender Inequalities in Unpaid Care Work
    Unpaid caregiving duties disproportionately impact women’s financial independence. EU initiatives, like affordable childcare and elderly care services, are crucial. Standardized paid leave and flexible work policies can further ensure that caregiving responsibilities do not inhibit women’s economic participation.
  5. Combatting Economic Violence
    Establishing legal standards across the EU for defining and preventing economic violence is critical. EIGE advocates for increased funding and support systems for women affected by financial abuse, along with awareness campaigns to redefine societal norms around economic control and domestic partnerships.

A Foundational Step Toward Social and Economic Equality in The EU

Gender equality in financial independence is a foundational step toward broader social and economic equality in the EU. The multi-faceted barriers to women’s financial autonomy—such as income and wealth gaps, caregiving duties, and financial abuse—need to be addressed via coordinated policy action, public awareness, and robust data collection.

By implementing EIGE’s recommendations, EU institutions and Member States can forge a path toward equitable financial independence and a society where economic decisions are equally accessible to all, regardless of gender.