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More Money, More Say?

Gender Balance in Financial Decision-Making

In their latest study, Martin Klesment and Jan Van Bavel investigated how women’s relative education and earnings determine who makes important decisions for the family, particularly decisions to spend significant sums of money, to borrow money or spend savings.
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Christian Dubovan, Unsplash

Source: Christian Dubovan / Unsplash

Over the past decades, the differences between gender roles have weakened in most Western societies. Men and women have become more similar in patterns of educational attainment, labour market participation and earnings. Previously, the primary measure of gender roles in heterosexual partnerships has been the uneven division of household tasks and child care. This rather outdated perspective isn’t the norm anymore, which is why different questions should be asked and answered now. Partners acting out the traditional gender roles in the family may now stand in relation to the relative resources. It has been revealed, that even though women have become more equal or even the main breadwinner, most of the domestic workload still falls to the wife. The question remains how increasing levels of women’s income actually influence the dynamic of couples, for example, the likelihood of each partner taking on financial decision-making responsibilities.

In their latest study, Martin Klesment (Tallinn University) and Jan Van Bavel (University of Leuven) investigated how women’s relative education and earnings determine who makes important decisions for the family, particularly decisions to spend significant sums of money, to borrow money or spend savings. These are called ‘major outlay decisions’, which are made less frequently than decisions about everyday life and thus something that sets this analysis apart from the more common domestic work and child care research. They used data from the European Union Statistics on Income and Living Conditions from 2010 for 27 European countries.

The results suggest that woman’s relative earnings are positively associated with the probability that she would be the main decision-maker in major outlay decisions. That means that the higher her relative earnings, the greater the likelihood of being the principal decision-maker. There is just one exception in this pattern: when the man’s income is significantly lower compared to his partner, the likelihood that he is reported to be the decision maker in financial issues increases. These results support the argument that non-traditional couples – defined as couples where the woman earns much more than the man – may in some ways intentionally display traditional gender roles. For example, the wife may want to take a step back for the husband to make important financial decisions to portray their family as more traditional than it actually is. Their findings also indicate that the higher women’s educational background is the odds that she would make the major outlay decisions or decide other important matters increase.

Overall, the study suggests that both relative education and relative earnings have a significant impact on the decision-making balance in the family. An increase in marriages to a spouse of lower socioeconomic status and increasing female breadwinning may alter spending and consumption patterns and have an effect on family formation. These insights on gender balance in marriages should be considered for future policy-making regarding families, fertility and opportunities for men and women.

Additional Information

Writers

Rika Bielig

Authors of Original Article

Source

Klesment, M. and Van Bavel, J. (2022). Women’s Relative Resources and Couples’ Gender Balance in Financial Decision-Making, European Sociological Review, 38 (5): 739-753, https://doi.org/10.1093/esr/jcac019