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Control over Money in Marriage

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Abstract

The basic question addressed in this chapter is “Who gets what in a marriage?” I begin with the observation that any marriage involves two individuals, each of whom has their own experience of that marriage. The focus is on the economic outcomes experienced by each partner, and the influences on those outcomes. Which partner has greater control over the family’s finances? Which partner’s preferences are represented in family consumption decisions? Much of the current research on this issue, which uses family expenditure data, encounters a severe limitation: there are very few consumption items which can unambiguously be assigned to men, women or children. This paper answers the question “who gets what?” in a novel way. I use data on how families manage their finances, to find out who has access to, who manages and who controls the family finances. I also explore the determinants of financial control. Does an improvement in one spouse’s bargaining position lead to greater control over money, or is control over money simply party of the couple’s division of labor? The study is based on a new a survey of families with children in the Ottawa-Hull area carried out by the author. The paper begins with a survey of recent developments in the study of intra-household resource allocation. What do we know about how resources are allocated inside households? What do we know about why the pattern of household resources is as it is? I then go on to describe the data set used in the research, and the main empirical findings. I do not find a systematic pro-male or pro-female bias in household finances. However I do find that, as predicted by theory, partners with greater incomes have greater control over money, younger spouses do better, and there is less income pooling when one partner, especially the man, has been married before.

Suggested Citation

  • Frances Woolley, 2000. "Control over Money in Marriage," Carleton Economic Papers 00-07, Carleton University, Department of Economics, revised 2003.
  • Handle: RePEc:car:carecp:00-07
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    File URL: http://www.carleton.ca/economics/wp-content/uploads/cep00-07.pdf
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    References listed on IDEAS

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    1. Shelley A. Phipps & Peter S. Burton, 1995. "Sharing within Families: Implications for the Measurement of Poverty among Individuals in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 28(1), pages 177-204, February.
    2. Chen, Zhiqi & Woolley, Frances, 2001. "A Cournot-Nash Model of Family Decision Making," Economic Journal, Royal Economic Society, vol. 111(474), pages 722-748, October.
    3. Woolley, Frances R & Marshall, Judith, 1994. "Measuring Inequality within the Household," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 40(4), pages 415-431, December.
    4. Phipps, Shelley A & Burton, Peter S, 1998. "What's Mine Is Yours? The Influence of Male and Female Incomes on Patterns of Household Expenditure," Economica, London School of Economics and Political Science, vol. 65(260), pages 599-613, November.
    5. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-349, June.
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    Citations

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    Cited by:

    1. Bertocchi, Graziella & Brunetti, Marianna & Torricelli, Costanza, 2014. "Who holds the purse strings within the household? The determinants of intra-family decision making," Journal of Economic Behavior & Organization, Elsevier, vol. 101(C), pages 65-86.
    2. Alistair Munro, 2014. "Hide and Seek: A Theory of Efficient Income Hiding within the Household," GRIPS Discussion Papers 14-17, National Graduate Institute for Policy Studies.
    3. Choi, Kate H. & Tienda, Marta & Cobb-Clark, Deborah & Sinning, Mathias, 2011. "Immigration and Status Exchange in Australia and the United States," Ruhr Economic Papers 261, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Kate H. Choi & Marta Tienda & Deborah Cobb-Clark & Mathias Sinning, 2011. "Immigration and Status Exchange in Australia and the United States," Ruhr Economic Papers 0261, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    5. Pahl, Jan, 2008. "Family finances, individualisation, spending patterns and access to credit," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(2), pages 577-591, April.
    6. Iversen, Vegard & Jackson, Cecile & Kebede, Bereket & Munro, Alistair & Verschoor, Arjan, 2011. "Do Spouses Realise Cooperative Gains? Experimental Evidence from Rural Uganda," World Development, Elsevier, vol. 39(4), pages 569-578, April.
    7. Bertocchi, Graziella & Brunetti, Marianna & Torricelli, Costanza, 2012. "Is it money or brains? The determinants of intra-family decision power," CEPR Discussion Papers 9017, C.E.P.R. Discussion Papers.
    8. Susanne Elsas, 2016. "Income Sharing within Households: Evidence from Data on Financial Satisfaction," Social Sciences, MDPI, Open Access Journal, vol. 5(3), pages 1-16, September.
    9. Bertocchi, Graziella & Brunetti, Marianna & Torricelli, Costanza, 2012. "Is it money or brains? The determinants of intra-family decision power," CEPR Discussion Papers 9017, C.E.P.R. Discussion Papers.
    10. Selamah Yusof, 2015. "Household Decision-Making in Malaysia: The Ethnic Dimension," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 124(1), pages 283-293, October.
    11. repec:kap:reveho:v:16:y:2018:i:2:d:10.1007_s11150-016-9340-2 is not listed on IDEAS
    12. Angela Lyons & Urvi Neelakantan & Erik Scherpf, 2008. "Gender and Marital Differences in Wealth and Investment Decisions: Implications for Researchers, Financial Professionals, and Educators," NFI Working Papers 2008-WP-02, Indiana State University, Scott College of Business, Networks Financial Institute.
    13. repec:zbw:rwirep:0261 is not listed on IDEAS
    14. Rama Lionel Ngenzebuke & Bram De Rock & Philip Verwimp, 2018. "The power of the family: kinship and intra-household decision making in rural Burundi," Review of Economics of the Household, Springer, vol. 16(2), pages 323-346, June.
    15. Matthieu Delpierre, 2012. "The impact of liquidity constraints and imperfect commitment on migration decisions of offspring of rural households," Review of Economics of the Household, Springer, vol. 10(1), pages 153-170, March.
    16. Angela Lyons & Urvi Neelakantan & Ana Fava & Erik Scherpf, 2007. "For Better or Worse: Financial Decision-Making Behavior of Married Couples," NFI Working Papers 2007-WP-14, Indiana State University, Scott College of Business, Networks Financial Institute.

    More about this item

    Keywords

    marriage; intra-household rsource allocation; family financial management;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising

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