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Wealth Distribution within Couples

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Author Info

  • Grabka, Markus M.

    ()
    (DIW Berlin)

  • Marcus, Jan

    ()
    (DIW Berlin)

  • Sierminska, Eva

    ()
    (CEPS/INSTEAD)

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 Study (SOEP). In married and cohabiting couples men's net worth, on average, is 33,000 euros higher than women's. 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 partner 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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7637.

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Length: 28 pages
Date of creation: Sep 2013
Date of revision:
Publication status: published in: Review of Economics of the Household, 2013 [online first]
Handle: RePEc:iza:izadps:dp7637

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Keywords: intra-household allocation; wealth inequality; wealth gap; gender; financial decision-making; SOEP;

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References

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Cited by:
  1. Siobhan Austen & Rachel Ong & Sherry Bawa & Therese Jefferson, 2013. "Trends in the Gender Wealth Gap Among Single Households in Australia, 2002-2010," Bankwest Curtin Economics Centre Working Paper series WP1308, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
  2. Honohan, Patrick, 2006. "Household Financial Assets in the Process of Development," Working Paper Series RP2006/91, World Institute for Development Economic Research (UNU-WIDER).

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