Saving for Retirement: Household Bargaining and Household Net Worth

TitleSaving for Retirement: Household Bargaining and Household Net Worth
Publication TypeReport
Year of Publication2000
AuthorsLundberg, SJ, Ward-Batts, JL
InstitutionUniversity of Michigan, Michigan Retirement Research Center
Call Numberwp_2000/lundberg-batts_mrrc.pdf
KeywordsConsumption and Savings, Net Worth and Assets

Traditional economic models treat the household as a single individual, and do not allow for separate preferences of and possible conflicts of interest between husbands and wives. Since wives are typically younger than their husbands and life expectancy for women exceeds that for men, wives may prefer to save more for retirement than do their husbands. This suggests that households in which wives have greater relative bargaining power may accumulate greater net worth as they approach retirement. Most empirical models of net worth in the literature do not include characteristics of both spouses. We present a more complete unitary model of household net worth and find, among couples in the first wave of the Health and Retirement Survey, that the characteristics of both husband and wife are determinants of net worth. We explore the importance of bargaining in marriages of older couples by examining the empirical relationship between their net worth and factors such as relative control over current income sources, relative age, and relative education. We find some evidence that low relative education of wives is associated with low net worth.

Endnote Keywords

Saving/Net Worth

Endnote ID


Citation Key5409