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Women’s Retirement Incomes in New Zealand: A Household Bargaining Approach

Author

Listed:
  • John Gibson
  • Trinh Le
  • Grant Scobie

    (University of Waikato
    University of Canterbury
    New Zealand Treasury)

Abstract

Bargaining models of household wealth accumulation point to a potential conflict of interest between husbands and wives. Since wives are typically younger than their husbands and have longer life expectancy, they have to finance a longer expected retirement period. Thus, it is argued that when women have greater relative bargaining power, households will accumulate higher levels of wealth. However, in this paper, exactly the opposite pattern is reported for New Zealand. To explain this contradiction of the pattern reported in the literature, we construct a consumption smoothing model of saving for retirement. The results suggest that in this setting it may be rational for women with greater bargaining power to favour greater current consumption rather than wealth accumulation. These results indicate the importance of defining the policy context precisely when considering the implications of household bargaining models.

Suggested Citation

  • John Gibson & Trinh Le & Grant Scobie, 2004. "Women’s Retirement Incomes in New Zealand: A Household Bargaining Approach," Treasury Working Paper Series 04/22, New Zealand Treasury.
    • Handle: RePEc:nzt:nztwps:04/22
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    File URL: https://treasury.govt.nz/sites/default/files/2018-12/twp04-22.pdf
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    References listed on IDEAS

    as
    1. Browning, Martin, 2000. " The Saving Behaviour of a Two-Person Household," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(2), pages 235-251, June.
    2. Quisumbing, Agnes R., 1994. "Intergenerational transfers in Philippine rice villages : Gender differences in traditional inheritance customs," Journal of Development Economics, Elsevier, vol. 43(2), pages 167-195, April.
    3. Doss, Cheryl R., 1996. "Testing among models of intrahousehold resource allocation," World Development, Elsevier, vol. 24(10), pages 1597-1609, October.
    4. Shelly J. Lundberg & Jennifer Ward-Batts, 2000. "Saving for Retirement: Household Bargaining and Household Net Worth," Working Papers wp004, University of Michigan, Michigan Retirement Research Center.
    5. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    6. John Gibson & Grant Scobie, 2001. "A cohort analysis of household income, consumption and saving," New Zealand Economic Papers, Taylor & Francis Journals, vol. 35(2), pages 196-216.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Emma Gorman & Grant M Scobie & Yongjoon Paek, 2013. "Measuring Saving Rates in New Zealand: An Update," Treasury Working Paper Series 13/04, New Zealand Treasury.

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    More about this item

    Keywords

    Bargaining; Intra-household; Pensions; Retirement; Wealth; New Zealand; Superannuation;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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