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

72 Pages Posted: 29 Mar 2021 Last revised: 22 Apr 2022

See all articles by Ran Gu

Ran Gu

University of Essex - Department of Economics; Institute for Fiscal Studies (IFS)

Cameron Peng

London School of Economics & Political Science (LSE) - Department of Finance

Weilong Zhang

University of Cambridge - Faculty of Economics

Date Written: March 28, 2021

Abstract

When members of the same household have different risk preferences, whose preference matters more for investment decisions and why? We propose an intrahousehold model that aggregates individual preferences at the household level. This allows us to back out the distribution and determinants of bargaining power from household portfolio choice. We structurally estimate the model, analyze the determinants of bargaining power, and find a significant gender gap in bargaining power. While the gap is partially explained by gender differences in individual characteristics such as income and employment, it is also due to gender effects. These patterns hold broadly across Australia, Germany, and the US. We further link the distribution of bargaining power to perceived gender norms in the cross-section of households.

Suggested Citation

Gu, Ran and Peng, Cameron and Zhang, Weilong, The Gender Gap in Household Bargaining Power: A Portfolio-Choice Approach (March 28, 2021). Proceedings of Paris December 2021 Finance Meeting EUROFIDAI - ESSEC, Available at SSRN: https://ssrn.com/abstract=3814200 or http://dx.doi.org/10.2139/ssrn.3814200

Ran Gu

University of Essex - Department of Economics ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

HOME PAGE: http://rangu.org/

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Cameron Peng

London School of Economics & Political Science (LSE) - Department of Finance ( email )

United Kingdom

Weilong Zhang (Contact Author)

University of Cambridge - Faculty of Economics ( email )

Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom

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