Women Take On More Credit Card Debt After “Extraordinary Medical Expenses” Than Men Do

I want to know more about this research.

Photo credit: TechPhotoGal, CC0 Public Domain.

I’m not at all surprised by the conclusion this study draws, but I want to know more about the research:

Women start out behind men even before there’s an extraordinary medical expense, having, on average, 20 percent lower income, spending, and liquid assets, the study found. Women with families had credit card debt equal to about 0.8 months of income, vs. 0.6 months for men with families. A year after an extraordinary medical payment, women’s credit card debt was up to 0.9 months of income, while men’s debt was unchanged at 0.6 months.

Here’s my question: is the study only counting extraordinary medical expenses experienced by the woman or man, or is the study also counting people who take on credit card debt to cover a family member’s medical expenses?

That is: are we arguing that women’s medical care costs more than men’s care, that women have less income to put towards medical expenses than men do, or that women in heteronormative partnerships put family medical expenses on their credit cards more often than men do? (Or some combination of the above?)

I went directly to the source: The Gender Gap in Financial Outcomes, by J.P. Morgan Chase.

This is an amazing study. Let’s start with Finding 1:

Finding 1: While most primary account holders were men (54 percent), low-income primary account holders were more likely to be women.

I could write an entire Billfold post on that sentence, because it encompasses jobs, wages, and the balance of financial power in heteronormative partnerships. It also suggests that we are looking at both credit card debt and medical expenses experienced at the family level, not the individual—although they do not state whether the women with low incomes are partnered, single, or both. (I’m guessing both.)

The study does eventually clarify that they are looking at the family level, and adds one important note:

Accounts held by women were more likely to represent the financial activity of individuals rather than families.

Okay. I have a question about that. But let’s look at another paragraph first:

The gender gap in financial outcomes is larger for families than for individuals (Figure 6). Among individuals — accounts with only one user — women earned 17 percent less in take-home pay and spent 15 percent less on a monthly basis. In contrast among families — accounts with multiple users — women earned 26 percent less and spent 23 percent less on a monthly basis. The gender gap in liquid assets was similar in percentage terms across individuals and families.

Women who have separate financial accounts earn more money than women who share their financial accounts with others. Chase makes the distinction between “individuals” and “families,” but since they only count “individuals” as “accounts with only one user,” I want to know if they asked everybody whether they were single, partnered but unmarried, married but doing the separate finances thing, unmarried with children, etc.

Otherwise, the difference isn’t between “individuals” and “families.” It’s between women who have independent financial accounts and women who link their financial accounts to their partners’.

Chase does eventually clarify that the medical expenses they’re tracking could apply to anyone in the family, not just the account holder(s):

We find that, in any given year, 17 percent of women and 16 percent of men — roughly one in six across both genders — made an extraordinary medical payment (Figure 7). Put differently, women are just as likely as men to have made an extraordinary medical payment but had a lower ability to absorb the medical payment with their monthly income alone.

At this point in the study they’re using the word “family” exclusively, and I have to wonder if they’re leaving out all of the women with so-called “individual” accounts or if they’re including them in the data.

Either way, they eventually get to the conclusion:

A year after the extraordinary medical payment, the gender gap in financial outcomes had widened, leaving women with 9 percent more revolving credit card debt than men — a 14 percent increase in revolving credit card debt for women.

Medical debt disproportionately affects women, and that’s an important statistic to be aware of.

But now I’m really curious about that other statistic they dropped into the piece: the one about women who don’t have joint financial accounts earning more than women who do. There are so many implications one could draw from that data point, but I don’t want to draw them until I know more about the women who have their own accounts—are they married, are they unmarried-but-partnered, are they single, are they parents, how old are they, etc. etc. etc.

So I still want to know more about this research.