Publications

19 Feb 13

Wealth distribution within couples and financial decision making.

Authors: GRABKA Markus, MARCUS Jan, SIERMINSKA Eva.

Abstract: While most studies on wealth inequality focus on the inequality between households, this paper examines the distribution of wealth within couples. For this purpose, we make use of unique individual level micro data from the German Socio-Economic Panel (SOEP).In married and cohabiting couples, men have, on average, 33,000 Euro more net worth than women. We look at five different sets of factors (demographics, income, labor market, inheritances, financial decision making in the partnership) that might explain this wealth gap. We find that all factors contribute to the explanation of the wealth gap within partnerships, with inheritances and income being particularly relevant. Furthermore, we find that specific characteristics (e.g. self-employment, no migration background, inheritances, high income) that decrease the wealth gap for women increase it for men. For men the respective coefficients are even stronger in absolute terms. When examining intra-partnership financial decision making, we find the gap to be significantly smaller when the female manages the money and larger if the male partner has the last word in financial decisions.

Reference: GRABKA Markus, MARCUS Jan, SIERMINSKA Eva. Wealth distribution within couples and financial decision making. CEPS/INSTEAD, 2013, Working Papers n°2013-02, 32 p.

Keywords:
Wealth gap,
financial-decision making,
wealth inequality,
Intra-household allocation,
SOEP,
gender

JEL: D13, D31, D69, I31, J20.

Linked publications
SIERMINSKA Eva, GRABKA Markus, MARCUS Jan.
Review of Economics of the Household, 2013, vol. 11, n°4.
SIERMINSKA Eva, SMEEDING Timothy, ALLEGREZZA Serge.
In: GORNICK Janet, JANTTI Markus. Income Inequality: Economic Disparities and the Middle Class in Affluent Countries. Stanford University Press, 2013, pp. 285-311.
FORNERO Elsa, ROMITI Agnese, ROSSI Cristina
CEPS/INSTEAD, 2013, Working Papers n°2013-21, 44 p.
JANTTI Markus, SIERMINSKA Eva, VAN KERM Philippe.
In: GORNICK Janet, JANTTI Markus. Income Inequality: Economic Disparities and the Middle Class in Affluent Countries. Stanford University Press, 2013, pp. 312-333.