Who Makes the Financial Decisions in the Households of Older Americans

Household decision making is at the heart of economic activity; yet very little is known about the actual process. Traditionally, economic modeling of households has treated the decision making process as equivalent to having one person make the decisions. Dissatisfaction with this approach has led to the development of models that imply that the decisions are the product of a bargaining process within the household. We analyze data from the Health and Retirement Survey (HRS) to examine financial decision making within the households of older Americans. Our results are generally consistent with the bargaining model of household behavior.