IDEAS home Printed from https://ideas.repec.org/p/mrr/papers/wp004.html
   My bibliography  Save this paper

Saving for Retirement: Household Bargaining and Household Net Worth

Author

Listed:
  • Shelly J. Lundberg

    (University of Washington)

  • Jennifer Ward-Batts

    (University of Michigan)

Abstract

Traditional economic models treat the household as a single individual, and do not allow for separate preferences of and possible conflicts of interest between husbands and wives. Since wives are typically younger than their husbands and life expectancy for women exceeds that for men, wives may prefer to save more for retirement than do their husbands. This suggests that households in which wives have greater relative bargaining power may accumulate greater net worth as they approach retirement. Most empirical models of net worth in the literature do not include characteristics of both spouses. We present a more complete unitary model of household net worth and find, among couples in the first wave of the Health and Retirement Survey, that the characteristics of both husband and wife are determinants of net worth. We explore the importance of bargaining in marriages of older couples by examining the empirical relationship between their net worth and factors such as relative control over current income sources, relative age, and relative education. We find some evidence that low relative education of wives is associated with low net worth.

Suggested Citation

  • 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.
    • Handle: RePEc:mrr:papers:wp004
    as

    Download full text from publisher

    File URL: http://mrdrc.isr.umich.edu/publications/Papers/pdf/wp004.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Michael Baker, 2002. "The Retirement Behavior of Married Couples: Evidence from the Spouse's Allowance," Journal of Human Resources, University of Wisconsin Press, vol. 37(1), pages 1-34.
    2. Bergstrom, Theodore C & Bagnoli, Mark, 1993. "Courtship as a Waiting Game," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 185-202, February.
    3. Banks, James & Blundell, Richard & Tanner, Sarah, 1998. "Is There a Retirement-Savings Puzzle?," American Economic Review, American Economic Association, vol. 88(4), pages 769-788, September.
    4. Blau, David M, 1998. "Labor Force Dynamics of Older Married Couples," Journal of Labor Economics, University of Chicago Press, vol. 16(3), pages 595-629, July.
    5. Hurd, M., 1999. "Mortality Risk and Consumption by Couples," Papers 99-03, RAND - Labor and Population Program.
    6. Michael D. Hurd, 1990. "The Joint Retirement Decision of Husbands and Wives," NBER Chapters, in: Issues in the Economics of Aging, pages 231-258, National Bureau of Economic Research, Inc.
    7. James P. Smith, 1995. "Racial and Ethnic Differences in Wealth in the Health and Retirement Study," Journal of Human Resources, University of Wisconsin Press, vol. 30, pages 158-183.
    8. Michael Baker, 2002. "The Retirement Behavior of Married Couples: Evidence from the Spouse's Allowance," Journal of Human Resources, University of Wisconsin Press, vol. 37(1), pages 1-34.
    9. Michael D. Hurd & Kathleen McGarry, 1993. "Evaluation of Subjective Probability Distributions in the HRS," NBER Working Papers 4560, National Bureau of Economic Research, Inc.
    10. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
    11. Smith, J.P., 1996. "Racial and Ethnic Differences in Wealth in the Health and Retirement Study," Papers 96-12, RAND - Reprint Series.
    12. Browning, Martin, 1995. "Saving and the intra-household distribution of income: an empirical investigation," Ricerche Economiche, Elsevier, vol. 49(3), pages 277-292, September.
    13. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    14. Shelly Lundberg & Elaina Rose, 1998. "The Determinants of Specialization Within Marriage," Working Papers 0048, University of Washington, Department of Economics.
    15. Shelly Lundberg & Robert A. Pollak, 1996. "Bargaining and Distribution in Marriage," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 139-158, Fall.
    16. Richard Disney & Paul Johnson & Gary Stears, 1998. "Asset wealth and asset decumulation among households in the Retirement Survey," Fiscal Studies, Institute for Fiscal Studies, vol. 19(2), pages 153-174, May.
    17. Martin Browning, 2000. "The Saving Behaviour of a Two‐person Household," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(2), pages 235-251, June.
    18. Lundberg, Shelly & Pollak, Robert A, 1994. "Noncooperative Bargaining Models of Marriage," American Economic Review, American Economic Association, vol. 84(2), pages 132-137, May.
    19. Browning, Martin & Francois Bourguignon & Pierre-Andre Chiappori & Valerie Lechene, 1994. "Income and Outcomes: A Structural Model of Intrahousehold Allocation," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1067-1096, December.
    20. David A. Wise, 1990. "Issues in the Economics of Aging," NBER Books, National Bureau of Economic Research, Inc, number wise90-1, July.
    21. Manser, Marilyn & Brown, Murray, 1980. "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 31-44, February.
    22. Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 988-1010, December.
    23. Gustman, Alan L & Steinmeier, Thomas L, 2000. "Retirement in Dual-Career Families: A Structural Model," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 503-545, July.
    24. B. Douglas Bernheim & Jonathan Skinner & Steven Weinberg, 2001. "What Accounts for the Variation in Retirement Wealth among U.S. Households?," American Economic Review, American Economic Association, vol. 91(4), pages 832-857, September.
    25. Gustman, Alan L. & Steinmeier, Thomas L., 1999. "Effects of pensions on savings: analysis with data from the health and retirement study," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 50(1), pages 271-324, June.
    26. 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.
    27. Blau, David M., 1997. "Social security and the labor supply of older married couples," Labour Economics, Elsevier, vol. 4(4), pages 373-418, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Blau, David M. & Riphahn, Regina T., 1999. "Labor force transitions of older married couples in Germany," Labour Economics, Elsevier, vol. 6(2), pages 229-252, June.
    2. GholamReza Haddad, 2015. "Gender ratio, divorce rate, and intra-household collective decision process: evidence from iranian urban households labor supply with non-participation," Empirical Economics, Springer, vol. 48(4), pages 1365-1394, June.
    3. Lundberg, Shelly & Startza, Richard & Stillman, Steven, 2003. "The retirement-consumption puzzle: a marital bargaining approach," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1199-1218, May.
    4. Jens Bonke & Hans Uldall-Poulsen, 2007. "Why do families actually pool their income? Evidence from Denmark," Review of Economics of the Household, Springer, vol. 5(2), pages 113-128, June.
    5. Bergolo, Marcelo & Galván, Estefanía, 2018. "Intra-household Behavioral Responses to Cash Transfer Programs. Evidence from a Regression Discontinuity Design," World Development, Elsevier, vol. 103(C), pages 100-118.
    6. Alberto Alesina & Andrea Ichino & Loukas Karabarbounis, 2011. "Gender-Based Taxation and the Division of Family Chores," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 1-40, May.
    7. Robert A. Pollak, 2012. "Allocating Time: Individuals' Technologies, Household Technology, Perfect Substitutes, and Specialization," Annals of Economics and Statistics, GENES, issue 105-106, pages 75-97.
    8. Laurens CHERCHYE & Thomas DEMUYNCK & Bram DE ROCK, 2010. "Noncooperative household consumption with caring," Working Papers of Department of Economics, Leuven ces10.34, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    9. Levin, Mark (Левин, Марк) & Matrosova, Ksenia (Матросова, Ксения), 2018. "Development and Research of Economic Behavior of Households in Changing Conditions [Разработка И Исследование Экономического Поведения Домохозяйств В Изменяющихся Условиях]," Working Papers 041825, Russian Presidential Academy of National Economy and Public Administration.
    10. Andrew Shephard, 2019. "Marriage market dynamics, gender, and the age gap," PIER Working Paper Archive 19-003, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    11. Chiappori, Pierre-André & Donni, Olivier, 2009. "Non-unitary Models of Household Behavior: A Survey of the Literature," IZA Discussion Papers 4603, Institute of Labor Economics (IZA).
    12. Zhiyang Jia, 2005. "Labor Supply of Retiring Couples and Heterogeneity in Household Decision-Making Structure," Review of Economics of the Household, Springer, vol. 3(2), pages 215-233, June.
    13. Mizuki Komura, 2013. "Tax reform and endogenous gender bargaining power," Review of Economics of the Household, Springer, vol. 11(2), pages 175-192, June.
    14. Doepke, Matthias & Kindermann, Fabian, 2014. "Intrahousehold Decision Making and Fertility," IZA Discussion Papers 8726, Institute of Labor Economics (IZA).
    15. Arthur-Holmes, Francis & Abrefa Busia, Kwaku, 2020. "Household dynamics and the bargaining power of women in artisanal and small-scale mining in sub-Saharan Africa: A Ghanaian case study," Resources Policy, Elsevier, vol. 69(C).
    16. Keita, Moussa, 2011. "Influence de la négociation intra-ménage sur les dépenses d’éducation dans les ménages au Mali [Influence of intra-household bargaining on education expenditures in households in Mali]," MPRA Paper 57592, University Library of Munich, Germany.
    17. Martin Browning & Valérie Lechene, 2001. "Caring and Sharing: Tests Between Alternative Models of Intra-household Allocation," Discussion Papers 01-07, University of Copenhagen. Department of Economics.
    18. Robert Pollak, 2003. "Gary Becker's Contributions to Family and Household Economics," Review of Economics of the Household, Springer, vol. 1(1), pages 111-141, January.
    19. Mizuki Komura, 2013. "Fertility and endogenous gender bargaining power," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 943-961, July.
    20. Fafchamps, Marcel, 1998. "Efficiency in intrahousehold resource allocation," FCND discussion papers 55, International Food Policy Research Institute (IFPRI).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mrr:papers:wp004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MRRC Administrator (email available below). General contact details of provider: https://edirc.repec.org/data/isumius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.