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Wealth inequalities among seniors: the role of marital histories across cohorts

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Abstract

Wealth accumulation is the result of several factors: saving behaviors, inheritance, work and marital histories. In a context of increasing diversity of marital histories over cohorts, this article examines how relationship history may shape long-term wealth accumulation and wealth inequality. It goes beyond household wealth by looking at individual wealth. Focusing on individuals above 50 and using data from cross-sectional wealth surveys conducted in France in 2004, 2009, and 2014, we evaluate the contribution of their marital histories to individual wealth across different birth cohorts of men and women. We document the existence of a couple wealth premium, observed for both married and unmarried partners who are wealthier than the divorced, separated, or always single. Accumulated wealth significantly depends on marital history. Women have smaller wealth when they have not been continuously in a relationship. This is also the case for men but only for those belonging to the lowest quantiles. Over birth cohorts, marital break-up is responsible for less accumulated wealth. This is mainly noticeable for cohorts born after WWII. If marital histories had not diversified, the wealth accumulated by women would have been greater at older ages and those of men would have been more evenly distributed.

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Notes

  1. Since there is no agreement, and no possibility of contract, this regime involves de facto that each spouse retains exclusive ownership of property acquired during the marriage.

  2. In a separate property regime, couples hold all their assets separately. For most married couples, the property regime is the community property, where all assets acquired during the marriage (except inheritances) is owned jointly by both spouses.

  3. Computed as life expectancy measured at the age of effective labour market exit for men and women (see OECD, 2019).

  4. Frémeaux and Leturcq (2022) very recently investigates property regimes as a determinant of differential wealth accumulation between couples. Those with a separate property regimes accumulate more than couples with a community property regime.

  5. Laws of 11 July 1975 and 30 June 2000.

  6. More details on the sample size may be found in Tables 4 and 5.

  7. In some cases, savings accounts and life insurance were declared as jointly owned by the reference person and their spouse. In these cases, we consider the asset as jointly owned.

  8. We define as equal sharing all couples for whom the difference between equal sharing of wealth and individual owned wealth is less than 10% in absolute values.

  9. To test this equal split assumption, we consider couples in which at least one partner is between 50 and 75 years old, the age of the second member may be out this age range.

  10. For the last two categories, the information about the past marital history is available at the household level. We thus only know that at least one of the two partners has been divorced in the past.

  11. Note that the y-axis scales are not identical to make the graph as readable as possible.

  12. Tables 8 and 9 report descriptive statistics on wealth and its components across cohorts for men and women.

  13. Years of work are computed as the number of years in full-time-equivalent employment until the age of fifty to compare cohorts on the same lifespan. A year worked part-time is counted as a half-year and we exclude years of unemployment, in order to obtain a measure of real experience.

  14. In France, upon the death of a spouse, the survivor may choose between inheriting at least 1/4 of the wealth of the dead spouse (in full ownership) or the right of usufruct (the right to use the property and receive the income) on his whole inheritance. The share of the inheritance in full ownership may even be higher if the couple signed a specific contract, which results in a higher part of inheritance for the survivor. Note that the surviving spouse’s share, while increased by this type of contract, remains limited. Under French law, children are always entitled to a part of the inheritance.

  15. As always single have never been in a coresidential relationship, this duration is by definition zero. The coefficient of their dummy variable now compares them to very recently married individuals with a union duration of zero years, while in columns 1 & 3, they are compared to married individuals with the average union duration. This explains why the parameter of always single is not significant in columns 2 & 5.

  16. We use two different specifications for individuals based on first results where all specifications were linear or quadratic. We ended with a quadratic form for individuals still in a relationship and a linear form for single individuals after a relationship. This is, at least for people still in a union, consistent with Lersch and Kappelle (2020), who found an increasing premium during the first years of marriage.

  17. Moreover, we may expect the level of donations to be higher for married compared to others. Although we have some information on this aspect in the survey, this information is not detailed enough to analyze in more detail the timing of donations for different marital histories.

  18. To do so, we interacted the marital status with a variable grouping five years of birth (four for the first and last groups, see Table 5).

  19. For cohabiting women, the parameter might not be well estimated at the very top of the distribution, due the small sample size of this subgroup.

  20. For readability reason, we chose to group the cohorts into only two categories.

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Funding

This research has received funds from the French Research Agency (ANR), Project Vieillir à deux, 15-CE36-0009-CN.

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Authors and Affiliations

  1. INED, Institut national d’études démographiques, Aubervilliers, France

    Carole Bonnet, Enrica Maria Martino, Benoît Rapoport & Anne Solaz

  2. CHILD (Collegio Carlo Alberto), Turin, Italy

    Enrica Maria Martino

  3. Université Paris I, Paris, France

    Benoît Rapoport

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  1. Carole Bonnet
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  2. Enrica Maria Martino
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  3. Benoît Rapoport
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  4. Anne Solaz
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Correspondence to Anne Solaz.

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Appendix

Appendix

Figures 7–10 Tables 4–11

Fig. 7
figure 7

Wealth distributions by cohort and age group

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Fig. 8
figure 8

Wealth distributions by cohort and age group, women

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Fig. 9
figure 9

Impact of marital status across wealth distribution, two groups of cohorts, men

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Fig. 10
figure 10

Impact of marital status across wealth distribution, two groups of cohorts, women

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Table 4 Age ranges available according to survey years and birth cohorts
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Table 5 Distribution of the sample across year of birth
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Table 6 Labor market variables by gender and marital status
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Table 7 Socio-demographic variables by gender and marital status
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Table 8 Wealth and its components by marital status, men
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Table 9 Wealth and its components by marital status, women
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Table 10 Robustness checks
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Table 11 Robustness checks–Type of wealth
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Bonnet, C., Martino, E.M., Rapoport, B. et al. Wealth inequalities among seniors: the role of marital histories across cohorts. Rev Econ Household 21, 815–853 (2023). https://doi.org/10.1007/s11150-022-09633-7

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  • DOI: https://doi.org/10.1007/s11150-022-09633-7

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