Working Paper

Decomposing Gender Differences in Bankcard Credit Limits

Abstract: Using linked mortgage application and credit bureau data, we document the existence of unconditional and conditional gender gaps in the distribution of total bankcard limits. We estimate that male borrowers have approximately $1,300 higher total bankcard limits than female borrowers. This gap is primarily driven by a large gender gap in the right tail of the limit distribution. At the median and in the left tail of the total limit distribution, women have larger limits than men. Results from a Kitagawa-Oaxaca-Blinder decomposition show that 87 percent of the gap is explained by differences in the effect of observed characteristics, while 10 percent of the difference is explained by differences in the levels of observed characteristics. The gap is persistent across geographies but has varied over time. Overall, these gender gaps are small in economic magnitude and have changed over time favoring women.

Keywords: gender; credit; credit cards; decomposition;

JEL Classification: J16; G51; G53;

https://doi.org/10.21799/frbp.wp.2023.30

Bibliographic Information

Provider: Federal Reserve Bank of Philadelphia

Part of Series: Working Papers

Publication Date: 2023-12-05

Number: 23-30

Note: Revision of 21-35