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Gender, Intra-Household Allocations, and Financial Decision-Making

Paper Session

Friday, Jan. 7, 2022 10:00 AM - 12:00 PM (EST)

Hosted By: American Economic Association
  • Chair: Taha Choukhmane, Massachusetts Institute of Technology

Efficiency in Household Decision Making: Evidence from the Retirement Savings of U.S. Couples

Taha Choukhmane
Massachusetts Institute of Technology
Lucas Goodman
U.S. Treasury Department
Cormac O'Dea
Yale University


We study how married couples allocate their retirement saving contributions across each spouse’s retirement account using a new employer-employee linked dataset covering more than 1.3 million U.S. couples. Exploiting differences in matching incentives across employers, we find that 25% of couples could increase their total retirement saving, by an average of $749 a year, simply by reallocating some of their existing contributions to the account of the spouse with a higher marginal employer match rate. As a benchmark, we estimate that in the absence of any cooperation, around 40% of couples would make similarly inefficient allocations. This suggests that a substantial fraction of married couples make their retirement contributions in a way that is inconsistent with Pareto-Efficiency, the core assumption underlying collective models of household decision-making. Our results are not driven by inertia, but we find that coordination between spouses improves with indicators of greater marital commitment such as the length of the marriage.

The Gender Gap in Household Bargaining Power: A Portfolio-Choice Approach

Ran Gu
University of Essex
Cameron Peng
London School of Economics
Weilong Zhang
Cambridge University


When members of the same household have different risk preferences, whose preference matters and why? We propose an intrahousehold model that aggregates individual preferences at the household level, allowing us to back out the distribution and determinants of bargaining power from household portfolio choice. We structurally estimate the model using representative panels from Australia and Germany. Our results show a significant gender gap in bargaining power: in the average Australian (German) household, the relative importance of the husband’s risk preference is 44% (114%) higher than the wife’s. While the gap is partially explained by gender differences in individual characteristics such as income and employment, it is also due to gender effects. We further link the distribution of bargaining power to perceived gender norms in the cross-section of households.

Gender Roles in the Allocation of Spending Rights within the Household: Evidence from Additional Credit Cards.

Paolina Medina
Texas A&M University
Michaela Pagel
Columbia University, NBER, and CEPR


In this paper, we provide evidence that traditional gender norms matter in the allocation of credit or spending rights within a household. We document that women give husbands, fathers and other men more credit than to mothers, daughters, or other women. In contrast, men give wives the same credit as parents, offspring, or other men. We argue that these findings are consistent with the man being allocated more decision power in a household's spending decisions as the traditional head of the family. In turn, we document that men use their assigned rights and indeed spend more when being allocated credit by their wives, mothers, daughters, or other women.

Intra-household Frictions, Anchoring, and the Credit Card Debt Puzzle

Erkki Vihriälä
Aalto University


I study how intra-household frictions and anchoring contribute to the credit card debt puzzle, the co-holding of high-cost debt and low-yield liquid assets. First, I find couples co-hold 42 percent more as units than as individuals relative to income. Moreover, in a natural experiment, couples do not cooperate to reduce high-cost debt, suggesting that intra-household frictions contribute to co-holding. Second, I find individuals who regularly make credit card debt payments equal to or near the minimum account for 59 percent of individual co-holding. The evidence suggests anchoring to the minimum payment contributes to co-holding via these low payments.

Alessandra Voena
Stanford University
Jawad Addoum
Cornell University
Da Ke
University of South Carolina
Corina Mommaerts
University of Wisconsin-Madison
JEL Classifications
  • G5 - Household Finance
  • D1 - Household Behavior and Family Economics