From Patriarchy to Partnership: Gender Equality and Household Finance

54 Pages Posted: 17 Aug 2020

See all articles by Luana Zaccaria

Luana Zaccaria

Einaudi Institute for Economics and Finance (EIEF)

Luigi Guiso

Einaudi Institute for Economics and Finance (EIEF)

Date Written: July 15, 2020

Abstract

Using Italian survey data, we document a marked shift in household financial decision-making power from men to women. The share of wife-headed households increased from almost zero in the early 1990s to over 35% in recent years. This reflects a slow but steady social norm transformation that changed family governance from a patriarchal system to an egalitarian one. We use the variation of social norms across cohorts and regions to identify the effects of gender equality on household financial decisions. We find that more gender-neutral norms have a positive effect on household participation in financial markets, equity holdings, and asset diversification; these effects are stronger when the benefits from information and cost sharing between spouses are larger. Importantly, equality increases returns from financial investments. Taken all together, this evidence suggests that gender roles in household financial management can have large economic costs. Consistent with this, we show that the patriarchal system began to be abandoned when a pension reform in the early 1990s made it too costly for the younger cohorts to comply with traditional roles.

Keywords: Household Finance, Social Norms, Gender Equality

JEL Classification: D14, G11, G41

Suggested Citation

Zaccaria, Luana and Guiso, Luigi, From Patriarchy to Partnership: Gender Equality and Household Finance (July 15, 2020). Available at SSRN: https://ssrn.com/abstract=3652376 or http://dx.doi.org/10.2139/ssrn.3652376

Luana Zaccaria (Contact Author)

Einaudi Institute for Economics and Finance (EIEF) ( email )

Via Sallustiana, 62
Rome, 00187
Italy

Luigi Guiso

Einaudi Institute for Economics and Finance (EIEF) ( email )

Via Sallustiana 62
Rome, 00187
Italy
+39 06 4792 4858 (Phone)
+39 06 4792 4872 (Fax)

HOME PAGE: http://www.eief.it/faculty-visitors/faculty-a-z/luigi-guiso/

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