Do Males Still Specialize in Higher Household Finances?

Abstract

This research analyzes whether the male or female is the financially more knowledgeable spouse/partner in mixed-sex couple households. In financial survey research, such as the Survey of Consumer Finances, the initial respondent is asked who is the financially more knowledgeable person in the economic unit and the interview is then scheduled with that person. This research helps answer questions of (1) whether women are increasingly likely to be the financially more knowledgeable person, (2) whether the designation of the financially more knowledgeable person is actually a matter of household convenience and not the person that theory suggests would be the financially more knowledgeable, and (3) whether observed differences in male and female responses to attitude questions such as risk tolerance, actually represent structural differences in the types of households where the female, versus the male, is the financially more knowledgeable. Using the 2010 Survey of Consumer Finances, we found no time trend in women being the financially more knowledgeable person with females being more financially knowledgeable in 46% of mixed-sex couple households, a proportion that was slightly lower than the proportion in 1992 (47%). We also found a difference in the type of household in which women were the financially more knowledgeable. In households with a net worth in the top decile for mixed-sex couples, females in 2010 were financially more knowledgeable than the male in only 19% of the households. Based on a multivariate logistic regression, we found that (1) the more educated spouse/partner is likely to be financially more knowledgeable, and (2) the likelihood of the female being financially more knowledgeable decreases as net worth increases from zero and as net worth decreases below zero. The research also supported the finding that the designation of the financially more knowledgeable person was not simply a matter of convenience for the household as the effect of the employment status of the male and female suggests that the choice of the respondent is not related to availability of the spouse/partner to be interviewed, as females are more likely to be the respondent when both are employed than when the male only is employed.

Keywords: Gender, Survey of Consumer Finances, Financial knowledge, Household production model, Family decision-making, Gender roles

JEL Classification: D14, J12, J16