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Wealth Distribution within Couples and Financial Decision Making

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  • Markus M. Grabka
  • Jan Marcus
  • Eva Sierminska

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.

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Bibliographic Info

Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 540.

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Length: 26 p.
Date of creation: 2013
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp540

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Keywords: Wealth gap; Wealth inequality; Intra-household allocation; Gender; Financial decision making; SOEP;

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References

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Cited by:
  1. Grabka, Markus M. & Marcus, Jan & Sierminska, Eva, 2013. "Wealth Distribution within Couples," IZA Discussion Papers 7637, Institute for the Study of Labor (IZA).

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