Allocation within the household: direct survey evidence

We report on a new diary based expenditure survey that for the first time collects direct information on the allocation of all expenditures to different members of the household. The most important finding from the survey is that the mean share that wives have of all expenditures that are assignable to husband or wife is well determined and very close to one half. Despite this equality at the mean, there is considerable dispersion across the population and in half of households one partner receives twice as much (or more) as the other. Moreover, these expenditures comprise a sizable part of the household budget. For example, the mean joint expenditure by husbands and wives on their own private, assignable goods accounts for 11% of disposable income. The main observable determinants of the variation of sharing expenditures across couples are a mixture of variables found in previous studies and variables that have not been considered before. As regards the former, we find that wives in higher educated and/or higher income households have a higher expenditure share. The other familiar effect is that the wife`s share of assignable expenditures is increasing in her share of gross income. Turning to variables that have not previously been considered in the literature, we find that some of these are highly significant and also have a strong impact on sharing. If the husband had a mother who was in full-time employment when he was aged 14 then he receives over two percentage points more of assignable expenditure than if his mother was not employed full-time. The strongest effect is also the most puzzling. If the wife has a child who is not the natural child of her partner then she receives six percentage points of assignable expenditure less than an otherwise comparable woman. On the other hand, men do better if they have had a previous child.