IZA DP No. 6648: Is It Money or Brains? The Determinants of Intra-Family Decision Power
revised version published as 'Who Holds the Purse Strings within the Household? The Determinants of Intra-family Decision Making' in: Journal of Economic Behavior & Organization, 2014, 101, 65-86
We empirically study the determinants of intra-household decision power with respect to economic and financial choices using a suitable direct measure provided in the 1989-2010 Bank of Italy Survey of Household Income and Wealth. Focusing on a sample of couples, we evaluate the effect of each spouse's characteristics, household characteristics, and background variables. We find that the probability that the wife is in charge is affected by household characteristics such as family size and total income and wealth, but more importantly that it increases with the difference between hers and her husband's characteristics in terms of age, education, and income. The main conclusion is that decision-making power over family economics is not only determined by strictly economic differences, as suggested by previous studies, but also by differences in human capital and experience. Finally, exploiting the time dimension of our dataset, we show that this pattern is increasing over time.