Association for Public Policy Analysis & Management

Expanding on recent work that has explored the relationship between relative household income share and division of general non-market work in married couples, this study will focus in on how couples share responsibility for household financial management, like saving, investing, and budgeting. The aim of this research is to identify the effect of a wife earning more than her spouse on her responsibility for household finances. Past research has shown that among working wives, those who out earn their husbands take on an even greater share of household work in an attempt to compensate for deviation from traditional gender roles. Because a wife earning more results in a decrease in male gender identity utility. His wife takes on more work in the household, “doing gender”, in an attempt to bring his identity utility back into equilibrium (West, Zimmerman 1987). These studies focused on general household work, like cooking, cleaning, and caring for children. This study focuses on household financial management. 

The data used for this study come from the Federal Reserve of Boston's 2008-2012 Survey of Consumer Payment Choice which is connected to the American Life Panel. With this panel data, a fixed effects probit model is estimated. The key outcome variable of interest is a binary responsibility variable that takes on a 1 if the individual is responsible for all or most of the responsibility for the specific task and 0 otherwise (i.e. if they take on less responsibility). We estimate the probability of taking on all or most of the responsibility for 4 key financial management tasks, budgeting, managing savings and investment, shopping, and other financial tasks. Individual fixed effects are included in the model to account for time-invariant observed and unobserved characteristics. Interactions with gender for all explanatory variables will allow identification of heterogenous effects based on income, race, and age. Year and state fixed effects are included in the model to control for temporal and location invariant effects. Preliminary results demonstrate that women who earn more than their husbands are more likely to take on all or most of the responsibility for managing household finances. A wife that earns more than her husband does increase the likelihood of assuming all or most of the responsibility for all financial management tasks. The highest probabilities are found for budgeting and shopping while managing savings and investment has the lowest probability.

This study has obvious implications for household financial well-being and family policy. It will be important to explore whether households where women are earning more and managing finances to a greater extent than their spouse are better or worse off financially. There is relatively little research on the way that men and women who are married or living together navigate their finances. Future work could explore the differences in indebtedness, net worth, savings behavior, credit worthiness of these households.