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Wealth distribution within couples and financial decision making

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  • GRABKA Markus
  • MARCUS Jan
  • SIERMINSKA Eva

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.

Suggested Citation

  • GRABKA Markus & MARCUS Jan & SIERMINSKA Eva, 2013. "Wealth distribution within couples and financial decision making," LISER Working Paper Series 2013-02, Luxembourg Institute of Socio-Economic Research (LISER).
  • Handle: RePEc:irs:cepswp:2013-02
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    Cited by:

    1. Anglade, Boaz & Useche, Pilar & Deere, Carmen Diana, 2017. "Decomposing the Gender Wealth Gap in Ecuador," World Development, Elsevier, vol. 96(C), pages 19-31.
    2. Mariacristina Rossi & Eva Sierminska, 2014. "Single again? Asset and portfolio changes due to widowhood shock," CeRP Working Papers 146, Center for Research on Pensions and Welfare Policies, Turin (Italy).
    3. Alyssa Schneebaum & Miriam Rehm & Katharina Mader & Katarina Hollan, 2018. "The Gender Wealth Gap Across European Countries," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(2), pages 295-331, June.
    4. Schneebaum, Alyssa & Rehm, Miriam & Mader, Katharina & Klopf, Patricia & Hollan, Katarina, 2014. "The Gender Wealth Gap in Europe," Department of Economics Working Paper Series 186, WU Vienna University of Economics and Business.
    5. Julia Groiß & Alyssa Schneebaum & Barbara Schuster, 2018. "Vermögensunterschiede nach Geschlecht in Österreich," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 44(1), pages 45-72.
    6. Markus Grabka & Jan Marcus & Eva Sierminska, 2015. "Wealth distribution within couples," Review of Economics of the Household, Springer, vol. 13(3), pages 459-486, September.
    7. ROSSI Cristina & SIERMINSKA Eva, 2015. "Single again? Saving patterns when widowhood occurs," LISER Working Paper Series 2015-04, Luxembourg Institute of Socio-Economic Research (LISER).
    8. Hayley Fisher & Hamish Low, 2015. "Financial implications of relationship breakdown: Does marriage matter?," Review of Economics of the Household, Springer, vol. 13(4), pages 735-769, December.
    9. Namizata Binaté Fofana & Gerrit Antonides & Anke Niehof & Johan Ophem, 2015. "How microfinance empowers women in Côte d’Ivoire," Review of Economics of the Household, Springer, vol. 13(4), pages 1023-1041, December.
    10. Julia Groiß & Alsyssa Schneebaum & Barbara Schuster, 2017. "Vermögensunterschiede nach Geschlecht in Österreich und Deutschland: Eine Analyse auf der Personenebene," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 168, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.

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    More about this item

    Keywords

    Wealth gap; financial-decision making; wealth inequality; Intra-household allocation; SOEP; gender;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D69 - Microeconomics - - Welfare Economics - - - Other
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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