A Comparative Study of Financial Literacy, Financial Resilience, and Mental Well-Being among Working Women in Tier 1 and Tier 2 Cities of India

Abstract

This research paper presents a comprehensive theoretical comparative study on the financial literacy, financial resilience, and mental well-being of working women in Tier 1 and Tier 2 cities of India. The introduction sets the stage by talking about women's growing economic roles and the fact that there are still differences between urban tiers. The problem statement highlights unequal access to financial knowledge and mental wellness resources between Tier 1 and Tier 2 urban women, motivating this study’s focus. The research methodology is based on secondary data synthesis and literature review of studies published from 2021 to 2025, integrating policy reports, empirical evidence, and theoretical models to frame the constructs and urban comparisons. The literature review synthesises recent findings, indicating that, although financial literacy programmes and digital inclusion initiatives have progressed in Tier 1 cities, socio-cultural constraints and digital divides hinder their effectiveness in Tier 2 cities. Financial resilience is higher in Tier 1 women, supported by insurance and fintech tools, whereas Tier 2 women rely more on informal safety nets yet face greater pandemic-induced vulnerabilities. Mental well-being studies show that stress at work and gendered burdens affect women more in Tier 2 settings, connecting financial insecurity to mental distress. The theoretical framework conceptualises financial literacy as the foundational enabler of resilience, which mediates mental well-being, moderated by gender norms, urban infrastructure, and socio-economic status. The comparative discussion highlights the urban tier disparities in literacy uptake, resilience capacity, and mental health supports, calling for context-sensitive empowerment strategies. The conclusion emphasises inclusive financial policies that incorporate mental health supports and gender equity measures, especially those targeting Tier 2 challenges. It also recommends empirical studies to evaluate digital literacy impacts, longitudinal mental health-finance links, and sociocultural moderating effects. This paper contributes to scholarly discourse by advancing a nuanced, integrative model of women’s financial and psychological empowerment across India’s urban spectrum, offering practical tips for researchers and policymakers alike.