Abstract
In this chapter saving rates are modeled as depending on intra-marriage financial distributions among spouses acting as independent decision-makers. Such distributions could be compensations for Work-In-Household (WiHo, see Chap. 2) supplied by one spouse and of value to the other. In the context of traditional gender roles an inter-temporal overlapping-generations model of individual behavior implies higher saving rates by young (pre-marriage) men than by young women. The opposite is predicted regarding the saving rates of married women relative to those of married men. This model potentially helps explain some cross-country variation in gender differentials in savings behavior. Furthermore, higher sex ratios are expected to be associated with higher savings rates among young unmarried men and lower savings among young women, while the opposite will hold for married men and women. Savings rates are also expected to be associated with combinations (matchings) of traits of husbands and wives, such as age and health. The higher the expected intra-marriage distribution the more WiHo-workers will earn in marriage and the more they will save as a proportion of their earned income. The opposite holds for WiHo-users. Whether a society allows polygamy can also help explain savings.
The original version of the chapter was revised: Co-author names are included in Chaps. 7, 9, 11, and table of contents. The erratum to this chapter is available at http://dx.doi.org/10.1007/978-1-4614-1623-4_12.
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Notes
- 1.
In South Korea all savings by married individuals have to be personal (see Lee and Pocock 2007).
- 2.
OECD (2014), “Household savings” (indicator). DOI: 10.1787/cfc6f499-en.
- 3.
Data for Italy were not available for 1990. The corresponding percentages ever married by age 34 for women were 82.2 and 57.9 % for Italy and 81.8 and 72.8 % for the U.S. The data were obtained from UN world marriage data at http://www.un.org/esa/population/publications/WMD2012/MainFrame.html. For the U.S. in 2010 the percent ever married was computed using the US census table creator at http://www.census.gov/cps/data/cpstablecreator.html.
- 4.
This is a Canadian cousin of IRA programs in the USA.
- 5.
A useful survey of the economic literature on this topic was published by Siwan Anderson (2007).
- 6.
Wei and Zhang (2011) also assert that the parents of daughters may save more, not less, even if the sex ratio is greater than one. The reason is that, although such parents may not need to save as much for their child’s marriage, they need to save more for old age because daughters are less likely than sons to help their parents during old age, especially if they have to move away after marriage to live with her husband’s family (see pp. 528–529).
- 7.
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Appendix
Appendix
The determinant of the Jacobian matrix of the first-order conditions with respect to s 1 and s 2 is positive, i.e., \(Det({{F}_{s}})>0\). This is a direct requirement of the optimization problem in that it relates to the strict concavity of the objective function with respect to the decision variables and satisfies the conditions of the implicit function theorem. To obtain the necessary information for the identification of the effects on savings behavior we totally differentiate F 1 and F 2 to obtain:
or using (11.10)
or using (11.10), (11.11), and (11.16)
where given (11.10) the first term has a negative sign.
From (11.13) and (11.18) it follows that \(\frac{\partial {{F}_{1}}}{\partial {{p}_{2}}}=-(1+r)\frac{\partial {{F}_{2}}}{\partial {{p}_{2}}}\) and these two derivatives will always have the opposite sign regardless of γ.
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Grossbard, S., Pereira, A.M. (2015). Savings, Marriage, and Work-in-Household. In: The Marriage Motive: A Price Theory of Marriage. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-1623-4_11
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