Ran Gu, Cameron Peng and Weilong Zhang

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

CWPE2130

Abstract: We quantify how bargaining power is distributed when spouses make financial decisions together. We build a model in which each spouse has a risk preference and must bargain with each other to make asset decisions for the household. By structurally estimating the model with longitudinal data from Australian households, we show that the average household’s asset allocation reflects the husband’s risk preference 44% more than the wife’s. This gap in bargaining power is partially explained by gender differences in income and employment status, but is also due to gender effects. We provide further evidence that links the distribution of bargaining power to views on gender norms in the cross-section.

JEL Codes: D13 G11 J16 G41 G51

Author links: Weilong Zhang  

PDF: https://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe2130.pdf

Open Access Link: https://doi.org/10.17863/CAM.69991

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