Thrifty wives and lavish husbands? - Bargaining power and financial decisions in Germany

Matthias Keese
Ruhr Graduate School in Economics, Germany

Numerous contributions in the literature show that household outcomes are influenced by the distribution of intra-household decision power expressed by indicators such as relative income of the spouses. Since women can expect a longer retirement period, increased female bargaining power may lead to higher savings and wealth accumulation. If, in contrast, saving preferences differ among sexes, a household may consume more in the current period e.g., to the benefit of the children. Using two German datasets and different measures of bargaining power, my analysis gives evidence that there is no or even a negative influence of female bargaining power on household savings and wealth when controlling for expectations on future support by public pension schemes of both spouses. Furthermore, in some specifications, I find positive associations between the wife's bargaining power and attitudes towards current consumption proxied by consumer credit and debt repayments.

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