Why Women Are Poorer Than Men by Annabelle Williams – Book Review

Review by Bori Toth

Economic inequalities between men and women have persistently been observed over the last decades, although public debate often doesn’t go further than discussing the pay gap. Even this narrow definition of gender inequality depicts a gloomy picture, as according to the Financial Times, the gender pay gap has widened in the UK in 2021 compared to previous years. Economic inequality, however, is a lot more complex than the pay gap, impacting women from the time they start participating in society in kindergarten, to old age and retirement. The multi-dimensional nature of economic inequality between women and men is uncovered systematically and captivatingly in Annabelle Williams’ book, ‘Why Women Are Poorer Than Men’.

Williams’ book is a comprehensive and rich deep dive into the many different ways economic inequality between genders manifests in rich democracies. Williams is quick to acknowledge the limitations of the book, namely that it is written from a Western European perspective, focusing mostly on cisgender women in a Western European cultural context, explaining that there is little evidence on the relationship between financial exclusion and gender diversity or sexual identity, as well as race or class, which makes it difficult to recognise and analyse patterns. Starting off with a review of the main historical events advancing gender equality and explaining the waves of the Western European feminism, the book provides insight to a range of different issues, some of which clearly have gender impact, such as period poverty, and others that are less apparent to the public, taking the gendered nature of the housing crisis as an example. In my review I will focus particularly on two chapters, the first covering common beliefs about women and money and why they are inaccurate, and the second focusing on pensions and old age.

The third chapter of the book, ‘What We Believe About Money’, discusses common myths that are often used to explain why women are less wealthy than men. The author argues that the media reinforces negative attitudes towards women and their capabilities regarding money, by characterising them as the spenders and splurgers, who need support on managing household finances. Simultaneously for men, wealth is portrayed as an attainable goal, part of the masculine ideal. Despite these different narratives, banks report that men and women actually spend in quite similar ways, making the sexism behind the above characterisation apparent.

Digging deeper into the gendered world of finance, a common sentiment is that women are more risk averse than men, which could partially explain the gender wealth gap. In contrast, evidence outlined by the author shows that when economic status is controlled for, women have similar attitudes to risk as men, and perform particularly well in investment simulations in research studies. The ‘women are risk averse’ stereotype is especially harmful, as it often forms the basis of financial advice that is provided to women, reinforcing the false narrative and limiting their financial capabilities. Setting the facts right is a timely and important contribution to the discussion on economic inequalities between genders.

Chapter four focuses on old-age poverty and pensions, making the case for a revised pension policy that takes gender inequalities into account. Williams outlines how women do not benefit from the current system: women on average tend to live longer than men, and therefore are required to save more than men over their lifetimes to cover those additional years in retirement. Women also earn less over their lifetime, partially due to pay gaps, glass ceilings and time taken off as maternity leave. With lower earnings, saving enough is much harder: while British men retire with an average of £315,000 saved in their workplace pensions, women at the same age have £157,000. According to the European Institute for Gender Equality, women face a significant risk of old age poverty.

Williams discusses interesting policy solutions to the gender pensions gap. One way to tackle the gap is by financially recognising ‘socially necessary unpaid work’, such as domestic care work. Evidence shows that this work can be valued at £762.75 per week, and if women were to receive a 3% contribution in their pension during maternity leave, they would be able to save a little short of £1200 a year for retirement. This would be an incredibly impactful step forward, and could contribute to closing the gender pensions gap by 28 per cent. This chapter is representative of the strengths of the whole book: Williams puts forward a strong and well-argued case for changing the current system that disadvantages women, and presents creative but feasible solutions on how to improve it.

While many of the issues raised in the book are systemic, and therefore cannot be counteracted by individual action, Williams recognises the agency of the individual when it comes to personal finances. Throughout the book, in relevant chapters, the author provides practical tips on how to ensure the reader is putting enough money in their pensions, or when to start investing. These sections nicely complement the more academic chapters, and allow the reader to take a step towards higher financial security.

Overall, ‘Why Women Are Poorer Than Men’ is an excellent book for anyone wanting to learn more about ways economic inequality between genders formed and is reinforced through our current economic system. While it is particularly relevant for UK-based and Western European readers, many of the issues discussed have an impact on women regardless of cultural background or geographical location.

Bori Toth is an economist, recently graduated from LSE. Her main interest lies in economic inequality, public finance and policy.