Wealth Distribution within Couples

28 Pages Posted: 5 Oct 2013

See all articles by Markus Grabka

Markus Grabka

German Institute for Economic Research (DIW Berlin)

Jan Marcus

German Institute for Economic Research (DIW Berlin)

Eva Sierminska

LISER; DIW Berlin - German Socio-Economic Panel Study (SOEP); IZA Institute of Labor Economics

Abstract

While most studies on wealth inequality focus on the inequality between households, this paper examines the distribution of wealth within couples. For this purpose, we make use of unique individual level micro data from the German Socio-Economic Panel Study (SOEP). In married and cohabiting couples men's net worth, on average, is 33,000 euros higher than women's. We look at five different sets of factors (demographics, income, labor market, inheritances, financial decision-making in the partnership) that might explain this wealth gap.We find that all factors contribute to the explanation of the wealth gap within partnerships, with inheritances and income being particularly relevant. Furthermore, we find that specific characteristics (e.g., self-employment, no migration background, inheritances, high income) that decrease the wealth gap for women increase it for men. For men the respective coefficients are even stronger in absolute terms. When examining intra-partnership financial decision-making, we find the gap to be significantly smaller when the female partner manages the money and larger if the male partner has the last word in financial decisions.

Keywords: wealth gap, wealth inequality, intra-household allocation, gender, financial decision-making, SOEP

JEL Classification: J2, D13, D31, D69, I31

Suggested Citation

Grabka, Markus and Marcus, Jan and Sierminska, Eva, Wealth Distribution within Couples. IZA Discussion Paper No. 7637. Available at SSRN: https://ssrn.com/abstract=2336434

Markus Grabka (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstrasse 58
SOEP
D-10117 Berlin
Germany
+49-30-89789-339 (Phone)
+49-30-89789-109 (Fax)

Jan Marcus

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

Eva Sierminska

LISER ( email )

3, avenue de la Fonte
Esch-sur-Alzette, L-4364
Luxembourg

HOME PAGE: http://www.sierminska.eu

DIW Berlin - German Socio-Economic Panel Study (SOEP)

Mohrenstra├če 58
Berlin, 10117
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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