Income Sharing within Households: Evidence from Data on Financial Satisfaction
Abstract
:1. Introduction
2. Background
2.1. Norms and Expectations Regarding Income Sharing
2.2. Empirical Findings about Income Sharing from Satisfaction Data
2.3. The Validity of Financial Satisfaction for Analyses of Intra-Household Sharing
3. Theoretical Approach
4. Data and Empirical Specification
4.1. Differences in Financial Satisfaction and the Distribution Factor
How satisfied are you today with the following areas of your life? Please answer by using the following scale: 0 means ‘totally unhappy’, 10 means ‘totally happy’.
How satisfied are you with your household income?
4.2. Further Covariates
5. Estimation and Results
5.1. Joint Estimates
5.2. Subsample Estimates
5.3. Interpretation
6. Concluding Remarks
Acknowledgments
Conflicts of Interest
References
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- 2.This information exists in only four of the 12 years of data that I use, but of those, it was 73% of the couples who congruently answered at least once that they pool their entire incomes; and those who pool do this for most (86%) of the time.
- 3.This information exists in only four of the 12 years of data that I use; 79% of the couples who answered congruently at least once that they make financial decisions together gave this answer in 71% of the years.
- 4.Less critical caveats include the argument that financial satisfaction depends not only on the income (share), but also on needs, expectations and deviations thereof (for an overview, see [30,31,32]), and may also be driven by individual’s personality [33,34,35]. These concerns are accounted for by controlling for a wide range of covariates and by using fixed effects estimation.
- 5.For single households, this is the household income; for individuals in multi-person households, it is some share of the household income. Note that the sum of shares may exceed the household income because of the economies of scales of living together [25].
- 6.According to the idea of adaptation [30], I assume that expectations about welfare levels are tailored towards the household’s scope, i.e., expected welfare-effective income is a function of total household income.
- 7.This assumption is necessary because otherwise, only deviations from expected shares of income can be detected and not deviations from equal sharing. In the cultural context of present-day Germany, which is characterized by individualization [38] and post-materialism [39], this assumption is sound. However, research into the allocation of domestic work (for an overview: [40]) and of income sharing (see [5,10,11,13,19]) shows that reality often falls short of such expectations.
- 8.For this step, the assumptions that partners expect equal sharing in terms of equal welfare levels (cf. Equation (1)) and that expected welfare-effective income is a function of the household income are necessary.
- 9.This distribution factor can be derived from bargaining models, as well as from the resource theory of power.
- 11.This reduces the sample by about .
- 12.While this variable could theoretically range from −10–10, its empirical range is −5–5.
- 13.These include all monthly incomes at the time of the interview that do not depend on the household’s structure or income, e.g., no means-tested transfers, but, for example, different sorts of unemployment benefits, child benefits and widows’ pensions.
- 14.Results are not shown here, though available on request.
- 15.Information about the household income is one partner’s response to the question: “If you take a look at the total income from all members of the household: how high is the monthly household income today? Please state the net monthly income, which means after deductions for taxes and social security. Please include regular income such as pensions, housing allowance, child allowance, grants for higher education support payments, etc.”
- 16.Couples where both partners are part-time or not employed (but not unemployed) and female breadwinner couples are too few for corresponding estimations.
- 17.The z-value for the difference of the effects is
Variable | Mean | SD | SD Within |
---|---|---|---|
Satisfaction difference | −0.137 | 1.573 | 1.207 |
Men’s financial satisfaction | 6.347 | 2.131 | 1.154 |
Women’s financial satisfaction | 6.484 | 2.159 | 1.176 |
Men’s income | 3344.59 | 2582.31 | 1229.92 |
Women’s income | 1406.11 | 1524.81 | 653.67 |
Income ratio | 0.705 | 0.244 | 0.112 |
Men’s working hours | 35.98 | 19.45 | 9.584 |
Women’s working hours | 20.24 | 18.21 | 8.579 |
Working hours ratio | 0.586 | 0.341 | 0.178 |
Equivalized household income | 2007.77 | 1160.37 | 586.36 |
Married | 0.893 | ||
Household without children | 0.377 | ||
Children under age of 6 in household | 0.211 | ||
Male breadwinner household | 0.512 | ||
Partners equally employed | 0.303 | ||
Female breadwinner household | 0.075 | ||
Households with at least one partner unemployed | 0.085 |
Variable | Dependent Variable: Satisfaction Difference | Dependent Variable: Financial Satisfaction | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Couples | Men | Women | ||||||||||||||
(1) | (2) | (3) | (4) | (5) | ||||||||||||
Coef. | SE | Coef. | SE | Coef. | SE | Coef. | SE | Coef. | SE | |||||||
Income ratio | 0.429 | *** | (0.119) | 0.443 | *** | (0.120) | 0.511 | *** | (0.116) | −0.007 | (0.123) | −0.451 | *** | (0.126) | ||
Working hours ratio | 0.104 | (0.093) | 0.188 | ** | (0.094) | 0.084 | (0.094) | |||||||||
Male breadwinner hh | -0.081 | (0.052) | ||||||||||||||
Female breadwinner hh | 0.012 | (0.063) | ||||||||||||||
Other hh empl. situations | 0.025 | (0.064) | ||||||||||||||
Man’s income | −0.026 | ** | (0.012) | −0.027 | ** | (0.012) | −0.026 | ** | (0.012) | 0.070 | *** | (0.014) | 0.097 | *** | (0.013) | |
Woman’s income | 0.011 | (0.007) | 0.012 | (0.007) | 0.010 | (0.008) | 0.012 | * | (0.007) | 0.000 | (0.008) | |||||
Man’s weekly working hours | 0.001 | (0.001) | −0.000 | (0.002) | 0.003 | * | (0.002) | 0.003 | * | (0.002) | ||||||
Woman’s weekly working hours | −0.002 | (0.001) | −0.001 | (0.001) | 0.003 | ** | (0.002) | 0.004 | *** | (0.001) | ||||||
Man part-time empl. | −0.005 | (0.051) | ||||||||||||||
Woman part-time empl. | 0.060 | (0.055) | ||||||||||||||
Man not employed | −0.048 | (0.077) | ||||||||||||||
Woman not employed | 0.085 | (0.068) | ||||||||||||||
Youngest child up to 3 years | 0.166 | * | (0.093) | 0.162 | * | (0.093) | 0.191 | ** | (0.093) | 0.050 | (0.091) | −0.112 | (0.091) | |||
Youngest child 4–6 years | 0.117 | (0.090) | 0.116 | (0.090) | 0.132 | (0.091) | 0.060 | (0.090) | −0.056 | (0.089) | ||||||
Youngest child 7–10 years | 0.154 | * | (0.088) | 0.153 | * | (0.088) | 0.167 | * | (0.088) | 0.100 | (0.087) | −0.053 | (0.087) | |||
Youngest child 11–16 years | 0.188 | ** | (0.082) | 0.187 | ** | (0.082) | 0.199 | ** | (0.083) | 0.011 | (0.081) | −0.176 | ** | (0.083) | ||
Yst. child older than 16 years | 0.134 | * | (0.071) | 0.132 | * | (0.071) | 0.139 | * | (0.071) | −0.084 | (0.072) | −0.216 | *** | (0.073) | ||
Monthly household income, log. | 0.106 | ** | (0.050) | 0.105 | ** | (0.050) | 0.110 | ** | (0.049) | 1.314 | *** | (0.056) | 1.208 | *** | (0.056) | |
Household size, log. | −0.332 | *** | (0.122) | −0.332 | *** | (0.122) | −0.329 | *** | (0.122) | −0.569 | *** | (0.122) | −0.237 | * | (0.122) | |
Married | 0.115 | (0.077) | 0.115 | (0.077) | 0.119 | (0.077) | 0.090 | (0.078) | −0.025 | (0.080) | ||||||
Living in owned home | 0.072 | * | (0.038) | 0.072 | * | (0.038) | 0.073 | * | (0.038) | −0.025 | (0.037) | −0.098 | *** | (0.037) | ||
Living in an urban area | 0.070 | (0.060) | 0.070 | (0.060) | 0.070 | (0.060) | 0.072 | (0.058) | 0.002 | (0.060) | ||||||
Man unemployed | −0.179 | *** | (0.055) | −0.170 | *** | (0.055) | −0.225 | *** | (0.062) | −0.559 | *** | (0.061) | −0.389 | *** | (0.059) | |
Woman unemployed | 0.107 | ** | (0.052) | 0.104 | ** | (0.052) | 0.133 | * | (0.074) | −0.249 | *** | (0.053) | −0.353 | *** | (0.053) | |
Man’s self-rated health | 0.121 | *** | (0.014) | 0.121 | *** | (0.014) | 0.121 | *** | (0.014) | 0.215 | *** | (0.015) | 0.094 | *** | (0.015) | |
Woman’s self-rated health | −0.097 | *** | (0.015) | −0.097 | *** | (0.015) | −0.097 | *** | (0.015) | 0.078 | *** | (0.013) | 0.176 | *** | (0.014) | |
Time fixed effects | yes | yes | yes | yes | yes | |||||||||||
Constant | −1.218 | *** | (0.414) | −1.244 | *** | (0.414) | −1.312 | *** | (0.418) | −6.046 | *** | (0.462) | −4.801 | *** | (0.466) |
Double Full-Time | Male Breadwinner Household | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
(1) | (2) | (3) | ||||||||
Distribution factor | ||||||||||
estimate, for | ||||||||||
- couples | 1.988 | *** | (0.485) | 1.257 | *** | (0.376) | −0.235 | (0.443) | ||
- men | 1.299 | *** | (0.480) | 0.204 | (0.329) | −0.657 | (0.453) | |||
- women | −0.688 | (0.468) | −1.053 | *** | (0.379) | −0.422 | (0.404) | |||
Estimate for the effect of | ||||||||||
- man’s income | ||||||||||
- on man’s SWHI | 0.010 | (0.064) | 0.117 | ** | (0.059) | 0.134 | *** | (0.047) | ||
- on woman’s SWHI | 0.139 | ** | (0.063) | 0.220 | *** | (0.060) | 0.092 | *** | (0.032) | |
- woman’s income | ||||||||||
- on man’s SWHI | 0.124 | ** | (0.060) | 0.015 | (0.015) | −0.010 | (0.016) | |||
- on woman’s SWHI | 0.047 | (0.056) | −0.012 | (0.016) | 0.005 | (0.015) | ||||
Subsample mean of | ||||||||||
- man’s SWHI | 6.795 | 6.714 | 6.497 | |||||||
- woman’s SWHI | 6.887 | 6.847 | 6.646 | |||||||
- satisfaction difference | −0.092 | −0.133 | −0.136 | |||||||
- income ratio | 0.556 | 0.757 | 0.929 | |||||||
n | 2525 | 3617 | 2436 | |||||||
N | 8065 | 11,737 | 7097 |
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Elsas, S. Income Sharing within Households: Evidence from Data on Financial Satisfaction. Soc. Sci. 2016, 5, 47. https://doi.org/10.3390/socsci5030047
Elsas S. Income Sharing within Households: Evidence from Data on Financial Satisfaction. Social Sciences. 2016; 5(3):47. https://doi.org/10.3390/socsci5030047
Chicago/Turabian StyleElsas, Susanne. 2016. "Income Sharing within Households: Evidence from Data on Financial Satisfaction" Social Sciences 5, no. 3: 47. https://doi.org/10.3390/socsci5030047