Abstract
Are savings evenly distributed and owned within families or do partners within families differ in their wealth? In this paper we investigated the ownership of financial assets within families and how joint savings affect the individual savings of the partners. We used anonymised monthly transactional data from ING Bank from 2014 to 2016 to observe financial data on Dutch couples. We found that savings were quite equally allocated in almost half of the households, while in the other half it was common that only one partner owned an individual account. The estimations showed that joint savings contributed to a more equal division of savings since they were held equally. However, we found larger differences in individual savings among partners who shared some savings, suggesting that the use of joint savings did not lead to individual savings being more evenly distributed, but rather to the opposite. The pattern was more apparent for households in their 20s and for savings accounts. The results of the study highlight the need for a better understanding of how partners make decisions about applying the sharing rule to joint and individual savings.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
Eurostat database at ec.europa.eu, code [lfsa_eppga].
Eurostat database at ec.europa.eu, code [sdg_05_20].
The statistics are available from the Statistics Netherlands database https://opendata.cbs.nl/statline/#/CBS/en/dataset/37425eng/table?ts=1571308829477
The tax rules are provided by Tax and Customs administration at https://www.belastingdienst.nl
The research was conducted under Think Forward Initiative project grant, and an agreement to access the anonymised bank dataset was part of the project. Data processing for scientific purposes was used in compliance with the General Data Protection Regulation.
Since the data on children are collected indirectly, some data may be missing. This would lead to lower estimates.
The ownership of pension accounts is very small because the data cover only voluntary defined contribution pension schemes, but the majority of voluntary pension schemes are in life insurance (HFCS 2017). Additionally, pension assets are only individual. However, we included these pension assets in the analysis as they can be liquidated when needed, contributing to the individual financial assets.
Regression estimations on the share of individual savings held by women or men showed that neither gender benefitted systematically from pooling. The variable indicating pooling was not statistically significant, whether the binary or continuous variable was used (not reported).
Although pension accounts are not held jointly, it is possible to estimate the difference in the shares of individual balances and how pooling is linked to the gap for any other products.
References
Ashby, K. J., & Burgoyne, C. B. (2008). Separate financial entities?: Beyond categories of money management. Journal of Socio-Economics, 37(2), 458–480. https://doi.org/10.1016/j.socec.2006.12.035
Ashby, K. J., & Burgoyne, C. B. (2009). The financial practices and perceptions behind separate systems of household financial management. Journal of Socio-Economics, 38(3), 519–529. https://doi.org/10.1016/j.socec.2009.02.007
Blundell, R., Chiappori, P. A., & Meghir, C. (2005). Collective labor supply with children. Journal of Political Economy, 113(6), 1277–1306. https://doi.org/10.1086/491589
Blundell, R., Chiappori, P. A., Magnac, T., & Meghir, C. (2007). Collective labour supply: Heterogeneity and non-participation. Review of Economic Studies, 74(2), 417–445. https://doi.org/10.1111/j.1467-937X.2007.00440.x
Burgoyne, C. B., Reibstein, J., Edmunds, A., & Dolman, V. (2007). Money management systems in early marriage: Factors influencing change and stability. Journal of Economic Psychology, 28, 214–228. https://doi.org/10.1016/j.joep.2006.02.003
Cantillon, S., Maître, B., & Watson, D. (2016). Family financial management and individual deprivation. Journal of Family and Economic Issues, 37(3), 461–473. https://doi.org/10.1007/s10834-015-9466-z
Chang, M. L. (2010). Shortchanged: Why women have less Wealth and what can be done about it. Oxford University Press.
Cherchye, L., De Rock, B., Lewbel, A., & Vermeulen, F. (2015). Sharing rule identification for general collective consumption models. Econometrica, 83(5), 2001–2041. https://doi.org/10.3982/ECTA10839
Chiappori, P.A., & Meghir, C. (2014). Intra-household welfare (No. w20189). National Bureau of Economic Research. https://doi.org/10.3386/w20189
Chiappori, P. A., & Meghir, C. (2015). Intra-household inequality. In A. B. Atkinson & F. Bourguignon (Eds.), Handbook of Income Distribution (pp. 1369–1418). Elsevier.
ECB (2016). The household finance and consumption survey: results from the second wave. ECB Statistics Paper Series, No. 18/December 2016. https://doi.org/10.2866/177251
Huang, Y, Perales, F., & Western, M. (2016). On whose Account? A Longitudinal Study of Financial Arrangements within Heterosexual Couples. Life Course Centre, Institute for Social Science Research, University of Queensland, Indooroopilly, Queensland, Australia.
Kan, M. Y., & Laurie, H. (2014). Changing patterns in the allocation of savings, investments and debts within couple relationships. Sociological Review, 62(2), 335–358. https://doi.org/10.1111/1467-954X.12120
Kenney, C. T. (2006). The power of the purse: Allocative systems and inequality in couple households. Gender & Society, 20(3), 354–381. https://doi.org/10.1177/0891243206286742
Kukk, M., & Van Raaij, W.F. (2018). To Pool or not to Pool: Allocation of Financial Resources within Households. Technical Report, Think Forward Initiative, Amsterdam.
Lee, J., & Pocock, M. L. (2007). Intrahousehold allocation of financial resources: Evidence from South Korean individual bank accounts. Review of Economics of the Household, 5(1), 41–58. https://doi.org/10.1007/s11150-007-9004-3
Lyngstad, T. H., Noack, T., & Tufte, P. A. (2011). Pooling of economic resources: A comparison of Norwegian married and cohabiting couples. European Sociological Review, 27(5), 624–635. https://doi.org/10.1093/esr/jcq028
Meriküll, J., Kukk, M., & Rõõm, T. (2021). What explains the gender gap in wealth? Evidence from administrative data. Review of Economics of the Household., 19, 501–547. https://doi.org/10.1007/s11150-020-09522-x
Pahl, J. (1983). The allocation of money and the structuring of inequality within marriage. Sociological Review, 31(2), 237–262. https://doi.org/10.1111/j.1467-954X.1983.tb00389.x
Pahl, J. (1990). Household spending, personal spending and the control of money in marriage. Sociology, 24(1), 119–138. https://doi.org/10.1177/0038038590024001009
Pahl, J. (2008). Family finances, individualisation, spending patterns and access to credit. Journal of Socio-Economics, 37(2), 577–591. https://doi.org/10.1016/j.socec.2006.12.041
Phipps, S., & Woolley, F. (2008). Control over money and the savings decisions of Canadian households. Journal of Socio-Economics, 37(2), 592–611. https://doi.org/10.1016/j.socec.2006.12.042
Rowlingson, K., & Joseph, R. (2009). Assets and Debts within Couples. Ownership and Decision-Making. Friends Provident Foundation, Dorking, Surrey, U.K.
Sierminska, E. M., Frick, J. R., & Grabka, M. M. (2010). Examining the gender wealth gap. Oxford Economic Papers, 62, 669–690. https://doi.org/10.1093/oep/gpq007
Sonnenberg, S. J. (2008). Household financial organisation and discursive practice: Managing money and identity. Journal of Socio-Economics, 37(2), 533–551. https://doi.org/10.1016/j.socec.2006.12.036
Zick, C. D. (1992). Do families share-and-share-alike? The need to understand intrahousehold resource allocations. Journal of Family and Economic Issues, 13(4), 407–419. https://doi.org/10.1007/BF01018922
Treas, J. (1993). Money in the bank: Transaction costs and the economic organization of marriage. American Sociological Review. https://doi.org/10.2307/2096283
Van Raaij, W. F., Antonides, G., & De Groot, I. M. (2020). The benefits of joint and separate financial management of couples. Journal of Economic Psychology, 80, 1–11. https://doi.org/10.1016/j.joep.2020.102313
Vogler, C., Brockmann, M., & Wiggins, R. D. (2006). Intimate relationships and changing patterns of money management at the beginning of the twenty-first century. British Journal of Sociology, 57(3), 455–482. https://doi.org/10.1111/j.1468-4446.2006.00120.x
Woolley, F. (2003). “Control over money in marriage.“ In: Marriage and the Economy: Theory and Evidence from Advanced Industrial Societies, S. Grossbard-Shechtman (Ed.), (pp. 105-128) Cambridge: Cambridge University Press.
Acknowledgements
The authors would like to thank Dimitry Fleming for his help with the database and technical issues, Jaanika Meriküll, Kim Peijnenburg, Tairi Rõõm, and participants at a TalTech research seminar, at EMS 2019, at the IAREP/SABE 2019 conference, at CEPR European Conference on Household Finance 2019, at EEA Congress 2020 and at BEA seminar for their useful comments.
Disclaimer
The views and opinions expressed in this report are solely those of the authors and do not necessarily reflect the official policy or position of the Think Forward Initiative - TFI - or any of its partners. Responsibility for the information, data and content in this article lies entirely with the authors.
Funding
The authors acknowledge Think Forward Initiative (TFI) for the research funding and ING for providing access to the anonymised data. Merike Kukk acknowledges financial support from the European Union’s Horizon 2020 Research and Innovation programme under Grant Agreement No. 952574.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
There is no conflict of interest.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Appendix
Appendix
See Tables 4, 5, 6, 7, 8, 9, 10, 11.
Rights and permissions
About this article
Cite this article
Kukk, M., van Raaij, W.F. Joint and Individual Savings within Families: Evidence from Bank Accounts. J Fam Econ Iss 43, 511–533 (2022). https://doi.org/10.1007/s10834-021-09783-3
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10834-021-09783-3
Keywords
- Family
- Savings
- Financial assets
- Allocation of resources
- Sharing rule
- Pooling
- Joint and individual
- Bank accounts