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Savings and Economies of Marriage: Intra-Marriage Financial Distributions as Determinants of Savings

Author

Listed:
  • Shoshana Amyra Grossbard

    () (Department of Economics,San Diego State University)

  • Alfredo Marvão Pereira

    () (Department of Economics, The College of William and Mary)

Abstract

This paper presents an inter-temporal model of individual savings behavior with intra-marriage financial distributions and uncertainty about marriage and divorce. Spouses paying these distributions experience diseconomies of marriage; the spouses who receive them benefit from economies of marriage. We show that higher likelihoods of marriage and divorce are associated with lower (higher) personal savings rates in the presence of diseconomies (economies) of marriage. These results hint at the possibility that structural patterns of social behavior may be at the root of the lack of effectiveness of conventional policy instruments, such as tax incentives, to promote personal savings.

Suggested Citation

  • Shoshana Amyra Grossbard & Alfredo Marvão Pereira, 2013. "Savings and Economies of Marriage: Intra-Marriage Financial Distributions as Determinants of Savings," Working Papers 95, Department of Economics, College of William and Mary.
  • Handle: RePEc:cwm:wpaper:95
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    File URL: http://economics.wm.edu/wp/cwm_wp95rev1.pdf
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    References listed on IDEAS

    as
    1. Siwan Anderson & Jean-Marie Baland, 2002. "The Economics of Roscas and Intrahousehold Resource Allocation," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 963-995.
    2. Phipps, Shelley & Woolley, Frances, 2008. "Control over money and the savings decisions of Canadian households," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(2), pages 592-611, April.
    3. Patricia Apps & Ray Rees, 2010. "Family labor supply, taxation and saving in an imperfect capital market," Review of Economics of the Household, Springer, vol. 8(3), pages 297-323, September.
    4. Massimo Guidolin & Elizabeth A. La Jeunesse, 2007. "The decline in the U.S. personal saving rate: is it real and is it a puzzle?," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 491-514.
    5. Almudena Sevilla-Sanz, 2010. "Household division of labor and cross-country differences in household formation rates," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(1), pages 225-249, January.
    6. Stephanie Seguino & Maria Sagrario Floro, 2003. "Does Gender have any Effect on Aggregate Saving? An empirical analysis," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(2), pages 147-166.
    7. Lupton, J. & Smith, J.P., 1999. "Marriage, Assets, and Savings," Papers 99-12, RAND - Labor and Population Program.
    8. Horioka, C.Y., 1991. "Saving in Japan," ISER Discussion Paper 0248, Institute of Social and Economic Research, Osaka University.
    9. Jungmin Lee & Mark L. Pocock, 2007. "Intrahousehold allocation of financial resources: evidence from South Korean individual bank accounts," Review of Economics of the Household, Springer, vol. 5(1), pages 41-58, March.
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    Cited by:

    1. Komura, Mizuki & Ogawa, Hikaru, 2014. "Pension and the Family," IZA Discussion Papers 8479, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    savings behavior; marriage; divorce; economies of marriage; gender roles;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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