TY  - RPRT
        AU  - Hermle, Johannes
AU  - Herold, Elena
AU  - Hildebrand, Nikolaus
        TI  - Preferences over Relative Income within the Household
        PY  - 2024/Feb/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 16803
        UR  - https://www.iza.org/publications/dp16803
        AB  - What preferences do partners hold over their relative income within the household? We provide a flexible framework of preferences over relative income within the household that captures various motives, including inequality aversion and a preference for being the primary earner. We study the role of these preferences for marital selection, separation and household public good provision in a marriage market matching model with search frictions. We test the model predictions using large administrative tax data from Germany. We document the existence of a kink point in the relative income distribution at the point of spousal income equality, consistent with the presence of kinked preferences over relative income. We also find the presence of a convex kink in wives' household public good provision, suggesting that women bear the incidence of spousal relative income preferences. To disentangle the preferences of women and men, we implement a survey experiment. Our results indicate that women exhibit inequality aversion while men exhibit a preference for being the primary earner.
        KW  - relative income concerns
KW  - relative income distribution
        ER  -