Sean R. Lauer and Carrie Yodanis
When couples share a household, they must settle on an approach to managing money in order to meet their individual and shared needs and desires. How money in households is managed goes beyond these practical arrangements, however. Embedded in these arrangements are questions central to social science including efficiency, trust, inequality, gender, social rules and expectations, cultural variation, and social change. As a result, money management has been a long-time interest of social scientists. Most often, this interest lies with the family and the dynamics between husbands and wives in households.
Two themes are prominent in the social science research on money management within couples: (i) the choice of integrating resources over keeping money separate and (ii) the equality of relationships associated with different money management strategies. Much of this research examines money management at the level of couples. After reviewing this research, we place the study of money management and couple-level analysis into a larger institutional-level analysis. We show that the dynamics of money in households are rooted in social arrangements larger than individual couples (Zelizer, 1989; Singh, 1997). The larger context shapes how spouses manage their money. Institutional arrangements, in particular the rules and expectations of marriage and gender, shape the variation in money management strategies over time and across cultures. With this perspective, the strategies for managing money in marriage become indicators of how both the institution of marriage and gender dynamics have or have not changed. The study of money management, gender, and households allows us to understand complex aspects of social institutions, culture, and social change. Our goal is not to suggest that all research on money management in marriage should focus on institutional contexts. Rather, we hope our review will draw attention to the important ways that couple-level and institutional-level analyses complement one another.
Sociologists have documented a number of management approaches within couples. For instance, married couples can choose to keep two separate pools of money. Treas (1993) describes this as keeping separate purses: his and her accounts, so to speak. Pahl (1983, 1995) calls this the independent management system. In Britain, Vogler, Brockmann, and Wiggins (2006) have seen this approach increasing slightly at the beginning of the twenty-first century to around 10% of British couples. Couples that kept at least some, if not all, money in separate purses made up 17% of those couples (Vogler, Brockmann, and Wiggins, 2006).
Despite these trends, most married couples across countries choose to pool their money in a common pot rather than maintain separate purses (Treas, 1993; Heimdal and Houseknecht, 2003; Pahl, 2008). The integration of money in marriage symbolizes, legally and practically, two individuals have become a single unit. Spouses move into the same home, open a joint bank account, file taxes together, and, in some places, have rights to half of all that is acquired throughout the marriage. Based on interviews with couples in Australia, Singh (1997) found that pooling money has grown to mean togetherness, commitment, and trust in marriage and thus be considered an essential foundation for a couple. As she writes, “When people speak of jointness and pooling, sharing, togetherness, trust and commitment, they express not only what they think is happening with money in their marriage, but what they expect to happen…” (Singh, 1997, p. 56). Vogler, Brockman, and Wiggins (2006) find nearly three-quarters of British couples choosing some form of pooling. Looking across 31 countries, Lauer and Yodanis (2011) find that over 80% of couples pool resources. For some couples, the decision to pool their money begins right away, while for others they slide toward pooling over the course of their relationship. For many married couples who start off with separate accounts, the slide toward some form of pooling can come quite quickly (Burgoyne et al., 2007, 2010). Similarly, cohabitors are more likely to pool resources the longer they have been together. When cohabitors have plans to marry or to have children, they are more likely to pool their money than cohabitors who do not see marriage or children in their future (Lyngstad, Noack, and Tufte, 2011).
Among the explanations for why couples pool their money, couple-level approaches remain prominent. Treas (1993), for example, provides the classic couple-level explanation for the pooling of resources. She follows transaction costs economic arguments and finds that when couples expect the relationship to last, when they have sunk costs in the relationship, and when monitoring of contributions is difficult, couples pool resources. When couples make long-term investments in the relationship such as marriage, raising children, or specialization in market versus household work, pooling resources reduces transaction costs, making it a more efficient management strategy. Her findings have been supported in research on cohabitation, divorce, and across country contexts (Burgoyne and Morison, 1997; Elizabeth, 2001; Heimdal and Houseknecht, 2003; Oropesa, Landale, and Kenkre, 2003). Comparisons of married and cohabiting couples are common here. For instance, Heimdal and Houseknecht (2003) compare married and cohabiting couples in the United States and Sweden and find that cohabiting couples are more likely to keep separate accounts, even when accounting for differences in socioeconomic status and gender ideology. Oropesa, Landale, and Kenkre (2003) find a similar pattern among married and cohabiting couples in Puerto Rico. In a follow-up study, Oropesa and Landale (2005) find more relationship stability among cohabitors that pool resources compared to those who keep separate accounts.
Building on the work of economists such as Pollak (1985), Treas (1993, p. 724) suggests that maintaining separate accounts introduces market-like exchange and bargaining between husbands and wives. While this can allow couples to maintain individual interests within the relationship, it also can increase day-to-day hassles of managing, coordinating, and haggling over financial decisions.
This is not to suggest that all couples act with consensus about the spending of money when collective strategies of money management are adopted. When money is pooled in a common pot, it can become a significant source of conflict within couples. Papp, Cummings, and Goeke-Morey (2009) find that conflicts about money are particularly intense and hard to resolve compared to more mundane conflicts over issues such as child care and chores. Using diaries completed over 15 days by both husbands and wives, they found conflicts surrounding children, chores, communication, and leisure more common than conflicts surrounding money. Though slightly less common, money conflicts were considered the hardest issue to work through by husbands and second hardest by wives.
Recognizing these conflicts, sociologists have focused their attention on the unique gendered dynamics of money management in couples. Within the collectivized approaches to family money management, Pahl (1983, 1995) makes further distinctions in management strategy including shared management, whole wage, and housekeeping allowance systems. When couples use a shared management system, they each have access to pooled assets, and each partner takes monies as needed. Whole wage approaches take two forms. In a male whole wage approach, the husband takes sole responsibility for managing household finances. A female whole wage approach sees a husband handing over a portion of his wages to his wife so that she can manage the household finances. The housekeeping allowance approach follows separate, gendered spheres of responsibility. In this arrangement, the husband manages the family money and provides an allowance to the wife for certain household expenditures.
As these different management approaches show, the decisions of household allocation can often reflect gendered preferences and power differences within the household. The management of assets is often examined as an indication of the equality of relationships with a shared management approach deemed ideal (Blumstein and Schwartz, 1991; Vogler and Pahl, 1993, 1994; Pahl, 1995; Elizabeth, 2001). When resources are jointly managed, both partners are more likely to have equal access to pooled monies. If one spouse manages the assets, however, there is more likely to be an imbalance in control over money, say, in how it is spent, and access to personal spending money or experiences of deprivation (Pahl, 1995).
Restricted access to assets is bundled with a number of other indicators of inequality, including a disproportionate share of the unpaid housework and less power and influence in decision making (Blumstein and Schwartz, 1985, 1991). Tichenor (2005), for example, links men’s say over money, veto power in spending decisions, other decision-making authority, and lack of responsibility for unpaid work at home as dimensions of male power in relationships. An imbalance in access and control over financial resources can have serious consequences, including economic dependence of one spouse on the other and barriers to leaving unhealthy and unsafe relationships (Barnett and LaViolette, 1993). Research on abuse within marriage finds a link between the controlling behavior associated with abuse and control of financial resources. Known as economic abuse, abusive men often control wives’ access to bank accounts and their ability to earn and control their own money (Johnson, 1995).
Blood and Wolfe (1960) provide the classic couple-level explanation for marital inequality stemming from money management. Using resource theory, they suggest that the relative resource contribution of spouses is the key factor promoting more or less equal arrangements. When relative resource contributions – income in particular – approach equality, there is a corresponding equality in management and access to money. Conversely, when one spouse is the sole or dominant provider, that spouse maintains an economic advantage and has better alternatives to the relationship, making them likely to be the sole money manager (Blood and Wolfe, 1960). While income contribution is important, Blumberg’s (1988) theory of gender stratification draws attention to control of resources. With a particular concern for inequality experienced by women in relationships, Blumberg (1988) points out that even when women contribute income or own property, they remain unequal with their spouses if they do not control the resources. This distinction between contribution and controlling of resources remains important in the sociological literature on money management in marriage (see Pahl, 1995; Schmeer, 2005).
For a long time, economists made the sociologically naïve assumption that couples shared interests, and therefore, they treated couples as a single decision-making agent (see Lundberg and Pollak, 1996). Within-couple dynamics were ignored in favor of the assumption of consensus within couples or of an altruistic leader making decisions in the best interest of the family. This began to change with the work of Manser and Brown (1980) and McElroy and Horney (1981) who broke up the couple into separate units with sometimes competing interests. These bargaining models draw on game theory to examine the competing interests of husbands and wives and threats to exit or withdraw. Husbands and wives can threaten divorce in the bargaining process. The more credible threat based on options available upon exiting the relationship determines advantage in the bargaining process. Lundberg and Pollak (1993) have proposed a model that uses the threat of withdrawn contributions to the couple’s shared goods. Here, husbands and wives only contribute the minimum to the couple in order to make the shared relationship better than divorce. The outcome is collectively worse as each pursue their singular interest rather than the benefits following from a shared agreement to cooperate. Income contributions again take an important place in the bargaining of husbands and wives.
The insights following from bargaining models have been used to study inequality in marriage in the United Kingdom (Lundberg, Pollak, and Wales, 1997), Canada (Phipps and Burton, 1998) and in developing countries such as South Africa (Gummerson and Schneider, 2012). Lundberg, Pollak, and Wales (1997) took advantage of a change in the UK Child Benefit in the late 1970s to examine bargaining dynamics between husbands and wives. Prior to 1977, a family and child tax deduction was available to households with children. This was discontinued and replaced with a Child Benefit payment made weekly to mothers. Lundberg, Pollak, and Wales (1997) found that with this change, there was a corresponding change in family expenditures toward wives’ and children’s goods, suggesting wives’ increased bargaining advantage.
Gummerson and Schneider (2012) have shown that the research in developing countries raises interesting questions about bargaining models. Typically, these models assume two-person, husband and wife, bargaining contexts. In many developing countries, however, households commonly include sets of adults who make income contributions and have interests on household expenditures. Examining data from South Africa, Gummerson and Schneider (2012) show that these more complicated household structures influence the bargaining dynamics. First, as the number of adults in a household increases, the influence of wives’ relative income contribution decreases. Second, they find that gendered bargaining dynamics still persist in larger households, with more female adults influencing household expenditures toward wives’ interests. The finding raises questions about household financial contributions coming from adults other than husbands and wives. While the research focuses on intrahousehold contributions, contributions from outside the household in the form of transfers or remittances may also be important (see Guzman, Morison, and Sjoblom, 2008).
Our own work (Yodanis and Lauer, 2007a, b; Lauer and Yodanis, 2011), which we draw on here, has built on Treas’s initial observation that “family financial practices exist in a context of cultural values and societal ideologies” (Treas, 1993, p. 727). The notion that institutionalized practices and norms shape couples’ options and their assumptions about possible action is rooted in new institutional approaches in sociology (Cherlin, 1978). The approach suggests that the institutional context within which couples are embedded provides tools that shape and limit possibilities for action (Swidler, 1986). Following Nee (2005, p. 55), we define institutions as “a dominant system of interrelated informal and formal elements – customs, shared beliefs, conventions, norms, and rules – which actors orient their actions to when they pursue their interests.” When couples decide a course of action, they do not act solely as a couple or as individuals, but as members of a larger social context, and they refer and defer to established rules for, practices of, and thinking about how to act. This approach provides an important complement to the couple level of analysis discussed earlier. An institutional approach, for instance, finds that decisions to integrate resources or to manage pooled resources equally are modified by the existing institutions in which they are embedded. In the following text, we first examine how an institutional approach can provide insights into a couple’s practice of integrating resources in a common pot or maintaining separate purses. Following this, we examine how an institutional approach can provide key understanding of inequality of money management in marriage.
As sociologists and historians have previously documented, marriage as an institution evolves over time (Burgess and Locke, 1945; Cherlin, 2004; Coontz, 2004, 2005). Originally, the focus of marriage was connecting families to advance and maintain their political and economic interests. The individuals getting married were largely irrelevant to this goal and had little say in the arrangement, which was used to build family networks in order to consolidate socioeconomic standing and power or secure economic survival (Coontz, 2005). Households did the work that other social institutions, including the economy and legal and political systems, do today (Mintz and Kellogg, 1988). These institutional arrangements were patriarchal, with a male head of the family having the legal and social authority to have control over the behavior and resources of family members, including the wife (Coontz, 2005). This patriarchy was reflected in male domination of money management. Zelizer (1989) has shown that patriarchal marriage was characterized by men controlling all of the household money, giving women only a certain amount to spend on household needs.
With larger societal and economic shifts, the state, economy, and other social institutions took over much of the production and power that had rested within the family (Mintz and Kellogg, 1988). In this context, marriage changed to what Burgess and Locke (1945) called a companionate marriage characterized by an integrated partnership between spouses. The focus of the companionate marriage is love and the feelings between the husband and wife as two people become one after marriage. The marriage symbolizes an integrated unit with each spouse specializing in a socially defined role – typically the husband as the income earner and the wife as a housekeeper and caregiver.
Fulfilling these traditional family roles took precedence over fulfilling one’s personal interests and desires. This interdependence between spouses was of relatively low risk because it was legally, economically, and socially difficult to end a marriage. Marriage, despite constraining personal freedoms, served as an institutional guarantee for the partners (Becker, 1981). As the institution of marriage shifted to companionate marriages, characterized by a greater integrated partnership between spouses, pooling money became the dominant arrangement for managing money (Zelizer, 1989).
Many contemporary sociologists and historians consider our current period a new stage in the institution of marriage (Giddens, 1992; Beck and Beck-Gernsheim, 2002; Amato et al., 2007). Lauer and Yodanis (2010) suggest that there are two separate propositions following from these current discussions of marriage that are often conflated. First, they find that these arguments suggest that marriage in many modern societies is one option among others, and the marital unit is no longer the only or most prominent coupling arrangement (Cherlin, 2004). They call this the alternatives to marriage proposition (Lauer and Yodanis, 2010, 2011). Second, they find a proposal that marriage is itself becoming more individualized (Amato et al., 2007; Cherlin, 2009). Individualized marriage includes new understandings of entering and exiting marriage. According to this proposal, relationships are being entered for their own sake and for the intimacy and emotional support that the relationship provides (Giddens, 1992). When partners no longer receive these benefits, they are free to leave the relationship to manage on their own or to find support in another relationship (Cherlin, 2009). As a result, even when in relationships, partners maintain their individuality and ability to leave the relationship and avoid arrangements that would make it difficult to end the relationship when it is no longer satisfying (Giddens, 1992). Within individualized marriage, the two individuals are less likely to become one interdependent unit or to sacrifice their own individuality for socially defined roles. They pursue their own interests and goals and remain two individuals within the context of a relationship. This leads to less specialization in tasks, with husbands and wives both contributing to the family income and unpaid care work. Roles are negotiated through a democratic process rather than by externally prescribed rules, with each partner having competencies in a wider range of roles and thereby being able to care and provide for him- or herself (Giddens, 1992). As with other institutional changes in marriage, these new rules and practices should be associated with different accepted practices for managing money. In particular, as we develop later, pooling money in a common pot runs counter to the practice of individualized marriages. Under individualized marriage, we should see each partner managing their own money.
There is an important symmetry to the research on transaction costs, individualized marriage, and decisions to pool or not to pool money in marriage. Treas (1993), as we noted earlier, first recognized the relevance of transaction costs arguments to the management of money in married couples. When relationship-specific investments are made, such as couple’s investments in their relationship through having children or specializing in market work, collective money management is more likely because of the efficiency gained through reduced transaction costs. Important to our institutional interest here, we argue that the relationship characteristics that transaction cost arguments attribute to forming collective arrangements are the inverse of factors attributed to institutional changes toward the individualization of marriage. Couples with individualized understandings of marriage seek to maintain independent identities and independence, including the ability to easily leave a relationship if they choose (Cherlin, 2009). Therefore, they avoid relationship-specific investments in an effort to maintain individual autonomy and the ease of ending relationships. As a result, within the context of individualized marriage, couples should be less likely to pool their money in a common pot and be more likely to keep and manage their money separately.
Supporting this, Treas and Widmer (2000) examined how characteristics of individualized marriage found in postmaterialist societies shape the management of money. Their work suggests that increased rates of cohabitation and declining beliefs that the purpose or outcome of marriage lies in relationship-specific investments (such as having children) increased the prevalence of couples who kept their money separate. Lauer and Yodanis (2011) looked at money management arrangements across 31 country contexts and found that keeping money separate was quite rare. Overall, only 6% of couples kept all of their money separate. There was variation across contexts. In Hungary and Spain, less than 1% of couples kept money separate, but in the United States, nearly 8% did. In Finland, just over half of couples pooled resources, but over 25% kept all of their money separate. Looking to explain this variation, Lauer and Yodanis (2011) find that when couples approached their marriage with individualized understandings, they were more likely to keep their money separate.
If the current institutional context of marriage tends toward individualization, the most surprising finding of this research may be the persistence of the practice of pooling money. Lauer and Yodanis (2011) find that keeping money completely separate is rare, and keeping even some money separate is uncommon. Even married couples who start off with individualized, separate money management systems move quite quickly toward some form of pooled money management (Burgoyne, Reibstein, Edmunds, and Dolman, 2007; Burgoyne, Reibstein, Edmunds, and Routh, 2010).
It can be valuable to compare married and cohabiting couples surrounding the decision to pool income. Cohabiting relationships are an alternative to marriage that appear to be more individualized and can relax some expectations for long-term commitment. Heimdal and Houseknecht (2003), for instance, find that cohabitors in both the United States and Sweden are more likely to keep their money in separate accounts than are married couples. This difference persists even when holding socioeconomic status and gender ideology constant. Even here, however, most cohabiting couples pool their incomes. In Sweden, where cohabiting is quite common, 52.1% of couples pooled resources, and in the United States, 54.3% pooled (Heimdal and Houseknecht, 2003, p. 532). In a study of Norwegian couples, Lyngstad, Noack, and Tufte (2011) find that, like married couples, cohabiting couples are more likely to pool resources when their relationships are long term.
A current debate in Canada regarding rights to money and financial assets in cohabiting couples highlights interesting questions from an institutional perspective. In Canada, couples in cohabiting relationships have been granted most of the same legal rights and responsibilities as married couples. The one exception has been financial rights, and this is currently also changing. In the province of British Columbia, for example, with the new Family Law Act, cohabiting couples who live together for 2 years will have joint legal access to money and property. Following the model of joint property rights in divorce law, these changes are meant to equalize partners’ access to money and property in the relationship. Yet in Quebec, where cohabiting is very common like in Sweden, there is opposition to requiring cohabiting couples to view their money as joint property. This, it is argued, would make cohabitation too much like marriage (LeBourdais and Lapierre-Adamcyk, 2004). Cohabiting, they have argued, should not have the same institutional rules as marriage because people choosing to cohabit instead of marrying are doing so because they want an alternative.
There are a few possible explanations for persistence of pooling resources in a common pot. First, there may remain some efficiency in pooling resources like those first addressed by Treas (1993), particularly when couples develop long-term continuity expectations or make relationship-specific investments. Second, Vogler, Brockmann, and Wiggins (2006) suggest that keeping money separate may promote more inequality in relationships, especially when spouses have unequal incomes (Kenney, 2006), an outcome that would not be appealing to couples in individualized contexts. Third, it may be that, even in contexts where marriage is becoming individualized, integrating resources remains an important symbol of commitment between partners (Singh 1997; Burgoyne et al., 2010). Finally, and perhaps most simply, the persistence of integrating resources may reflect the lack of individualization in the institution of marriage (Jamieson, 1999; Lauer and Yodanis, 2011). Indeed, there is evidence that many practices continue in marriage that are not indicators of individualized marriage, including wives taking their husbands’ last names in the United States, couples sharing friendship networks and spending large amounts of time together in leisure activities in the Netherlands, and a rigid gendered division of labor across countries (Kalmijn and Bernasco, 2001; Gooding and Kreider, 2010; Treas and Drobnic, 2010; Yodanis and Lauer, 2014).
One interesting development in the integration of resources involves what Ashby and Burgoyne (2008) call partial-pooling strategies. Partial-pooling includes couples who pool money while also keeping at least some money separate. Partial-pooling may capture the unique dynamics of individualization processes, as it allows couples to handle the practical aspects of coupling while maintaining some individual autonomy in the relationship. Looking across-country contexts, Lauer and Yodanis (2011) found that within countries where marriages were more individualized, couples were more likely to keep at least some money separate. Partial-pooling strategies may be an important area for future research on the decision to pool or not to pool resources.
As gender theorists have long argued, gender involves individual actions and beliefs and also becomes institutionalized in patterned ideology and expectations for behavior that rigidly shape and constrain possible actions (Ferree, 1990; Martin, 2004; Risman, 2004). As with the institution of marriage, gender structures shape couples’ management of money. Zelizer (1989, p. 368), for example, takes a historical look at money in marriage at the turn of the nineteenth century finding that “regardless of its sources, once money had entered the household, its allocation, calculation, and uses were subject to a set of domestic rules distinct from the rules of the market.” Rather than its typical instrumental designation as a means of exchange, money takes on meaning in the context of the household and the people who control it. This may vary by gender, class, and even age. Zelizer (1989) finds children’s money a subject of debate at the time, for instance. Allowances emerged as a proper allocation for children, but it was considered as educational money. It is wives’ money that particularly interested Zelizer (1989) – the means, timing, and amount allocated, along with its primary use as housekeeping money. She finds the allocation of housekeeping money followed cultural expectations, varying by class, rather than a universal logic of the market. In the domestic realm, the meaning of income earned by spouses and the arrangements for managing and spending money are tied to dominant beliefs and practices regarding men and women’s acceptable roles in marriage, in particular who is expected to be the breadwinner and who is expected to provide care (Blumstein and Schwartz, 1985). These institutionalized rules for gendered marital behavior evolve and change over time yet continually shape the role of money in marriage.
Gendered rules shape the dynamics of pooled money, including who and how spouses benefit from it. Returning to Pahl’s (1983, 1995) distinctions between shared management, whole wage, and housekeeping allowance systems, these various strategies for managing collective assets highlight that pooling assets can be an equal or unequal arrangement depending on who is in charge of the collective pot. An equal distribution of money means partners have equal access to assets; inequality exists when one spouse is in charge of the pooled assets. Although shared management can include unique inequalities (see Singh, 1997), Pahl (1995) has found that shared management is more equal than one spouse managing the pooled income (see also Vogler and Pahl, 1993, 1994; Nyman, 1999). Interestingly, shared management approaches are more equal for women than approaches that give them sole responsibility for the management of household finances. The gender of the spouse who is the sole manager of the money impacts spouses’ access to money and how they spend it. Research has found that, in general, women are disadvantaged if one spouse, either the wife or the husband, manages their pooled assets (Pahl, 1995; Nyman, 1999). Male management systems are associated with male dominance in the relationship and personal spending (Pahl, 2000). Yet, often women’s management is not related to their advantage in the relationship. Perhaps, surprisingly, women can experience more financial deprivation and less personal spending when they manage assets than if men do (Pahl, 1995; Nyman, 1999). Vogler and Pahl (1994), in a sample of British households, found that wives’ control of finances increased decision-making power but also resulted in greater financial deprivation for wives.
When a household has limited money and, thereby, the task of managing money and making ends meet is particularly difficult, women are more likely to have the job. Evidence from national and cross-national surveys shows that men are more likely to manage the money when the family income is high and women are more likely to manage the money when the family income is low (Pahl, 1983, 1995). When money is short and women are in control of finances, they deprive themselves of needs and desires rather than require the same sacrifices from other family members. Nyman (1999) captures this dynamic in her interviews of Swedish couples. In all couples, the wife had primary responsibility for day-to-day family expenditures. The wives in her study were often burdened with expenditures dealing with day-to-day management of the household. These expenditures often led them to take from their own discretionary money in order to meet these needs. In many cases, both husbands and wives agree that more of their household money is spent on the husband’s interests, but it was not acknowledged by the couples as unfair. Overall, men’s income and management of the couple’s pooled assets often translates into power, whereas women’s income and management can become another household task (Vogler and Pahl, 1994; Nyman, 1999).
These complexities are also apparent in Japan. In comparison to other countries, Japan is more traditional in terms of gender ideology and gendered divisions of labor (Yodanis and Lauer, 2007b). Despite this, Yodanis and Lauer (2007b), in a comparison of 21 countries, found Japanese women are far more likely to report that they, not their husbands, manage the household money. It seems that for Japanese women, money management might simply be part of household work. There is also evidence that Japanese women are not powerless in their money management position. Data from an insurance company survey in Japan found that a majority of Japanese women kept secret bank accounts that their husbands did not know about. They used this as security for the family and in case the relationship would end (Tanikawa, 2006).
The gendered aspects of household expenditures and the different interests and pressures associated with husbands and wives when spending money are an important demonstration of how the gendered household and gendered preferences are institutionalized. Wives’ spending of money is shaped by gendered expectations that women’s spending, not men’s, is directed toward the collective care of children and the family. This has consequences for child welfare (Pahl, 2000). Kenney (2008) points out that research in developing countries has often led the way here, noting that women’s control of income was associated with improvements in child health in Brazil (Thomas, 1990); increased spending on nutrients, health, and housing in Mexico (Djebbari, 2005); and increased spending on food and decreased spending on clothing, alcohol, and cigarettes in Ivory Coast (Hoddinott and Haddad, 1995). These dynamics are not limited to developing countries, however. In their classic study, Lundberg, Pollak, and Wales (1997) found increases in the ratio of children’s to men’s clothing expenditures with the initiation of the Child Benefit payment that went to mothers in the United Kingdom. In Canada, Phipps and Burton (1998) have also found women’s income associated with increased food expenditures. In the United States, Kenney (2008) finds that fathers’ control of money is associated with greater food insecurity for children in the low- and moderate-income households she examined.
Kenney’s research highlights the importance of control of household money, which is not always explicitly addressed in research on spending. Schmeer (2005) addresses income contribution and control separately in her research on expenditures in the Philippines. Her research examines weekly food expenditures and measures separately relative income contribution, control over pooled money spending, receipt of a spousal income transfer, or control of household food money. Schmeer (2005) finds that control of income by women in poor households is particularly important for directing resources toward purchases of food for children. Notably, this benefit is seen when women both contribute and control money and not when they only contribute or control money. This raises a question about the value of keeping separate accounts for gender equality in marriages. It seems clear that when wives have control of separate accounts, they are able to direct resources toward expenditures they deem valuable. Often, this improves the welfare of children in the household but may overlook the potential inequality stemming from keeping separate accounts. Wives on average earn less than husbands, so keeping separate accounts can create a default disadvantage. Nyman (1999) captures this in her research on Swedish couples, many of whom kept separate accounts. These couples held a strong orientation toward equality, but by keeping separate accounts, wives often deprived themselves of their own needs and desires in order to satisfy their children’s. Discussing the difficulties of balancing family needs, one respondent says, “…I think it would be really good if we had a joint account…where our paychecks could be deposited, we could pay all our bills from there…” (Nyman, 1999, p. 780). This desire captures the potential downside of separate accounts.
Gendered rules also shape how each spouse’s income translates into control over pooled resources. Institutionalized breadwinning roles, that is, expectations about who should be the primary income provider in couples, are a particularly important part of the money management context. In contexts with strong expectations that men, and not women, should be the primary providers within families, husbands have more access to and control over family income. Women with little or no income are less likely to have equal management arrangements with their husbands, while women with more equal income contributions are more likely to have control over the money (Kenney, 2006). Still, husbands’ control over the household money continues regardless of the true value of the income earned by each spouse (Blumstein and Schwartz, 1985; Vogler and Pahl, 1993; Vogler, 1998). Tichenor (1999) finds that when women earn more than men, the opposite of what resource theory and rational actor models would predict occurs. Women do not use their higher earnings to gain authority over financial assets and spending as men may do when they earn more. Instead, there is evidence that inequality again increases, with women often giving final veto power to their husbands when they provide more income to the relationship than their spouse. Tichenor, like Brines (1994) and Blumstein and Schwartz (1991), suggests that this occurs because of institutionalized rules for appropriate gender behavior that override the effect of resource contribution. When women make more than men, it is counternormative, as the socially defined expectations for the breadwinner role are violated. For women to control the income would further violate these rules. When women have access to the resources, they could use these to their advantage, as resource theory would predict, but they do not. Instead, gendered rules for behavior take precedence (Blumstein and Schwartz, 1985; Tichenor, 1999).
Recently, one of the more interesting developments in marriage research has questioned the potential of gendered rules of married life to override the importance of financial contributions to a household. This challenge has focused particularly on domestic labor (Gupta, 2006, 2007; Sullivan, 2011a). Gupta (2007) has proposed an autonomy hypothesis that suggests a wife’s absolute income is the most important factor influencing the amount of housework she engages in, with higher incomes leading to less housework. He finds support for this hypothesis, and importantly, this effect rules out the influence of relative resource contribution and overcompensation in gendered displays of housework. This work highlights the need to consider other social rules and practices, in addition to gendered inequalities, that can impact inequality in money management within households. Yodanis and Lauer (2007a), for example, find that the level of economic inequality overall in a society can influence the likelihood of having equal or unequal money management arrangements. High levels of income inequality, low levels of social expenditures, and ideological support of inequality in a country can trickle down into households, making unequal money management arrangements in households within those countries more likely.
Key to our discussion here, however, the argument in support of an autonomous effect of income on housework does not challenge a gendered household (see Gupta, 2007, Sullivan, 2011b). While surplus income can allow wives to purchase some freedom from housework, this dynamic assumes an institutionalized gendered household. In fact, Gupta (2007) points to the research on household expenditures coming from the money management field as an inspiration for the autonomous approach to domestic labor. The importance of these expectations is particularly clear when we look across contexts at the management of money. Treas and Tai (2012) found that, cross-nationally, women’s higher income relative to their husbands does translate into women having more say in major purchases, but it also translates into their making decisions about the children and weekend activities. In other words, women, especially if they have a higher income, do more of the household management. As Treas and Tai (2012, pp. 22–23) suggest, “traditionally responsible for family and household, women may feel a greater stake than men in household outcomes, or women may simply take on household management to validate a feminine identity by ‘doing gender.’”
Yodanis and Lauer (2007b) also use a comparative approach to study unequal versus equal money management arrangements across multiple country contexts. Gendered ideologies and practices that vary across countries, particularly related to breadwinner roles, are also an important influence on money management arrangements. Within contexts where shared breadwinning ideologies are dominant either ideologically or in practice, couples are less likely to report the unequal money management arrangement of one person controlling all the household income. Institutionalized gendered rules shape how women’s income is related to the management of money, the influence on the control of money, and the direction of household expenditures.
The management of money in marriage has proven to be a rich source of research for sociologists. Cross-national surveys comparing dozens of countries and country-specific studies from across the globe, including Canada, the United Kingdom, the United States, Puerto Rico, the Philippines, Japan, South Africa, Sweden, Norway, and Australia, have provided important insights to a daily practice, interaction, source of conflict, and inequality within households.
Day to day, couples manage household income through couple-level interaction. Yet the rules for these interactions are rooted in institutionalized rules and practices that shape how it is done and the consequences of it. As sociologists, we take a step back from the interactions to understand the institutional arrangements that shape the variation in money management strategies over time and across cultures. Through these analyses, the study of money management helps us understand how both the institution of marriage and gender dynamics have changed (or how much they have not changed). From recent studies, we know that pooling money remains common in marriage and that women manage money when resources are tight and prioritize the needs and desires of other family members over their own. The study of money management in households can thus lead us to question the extent to which marriage is actually individualized and the extent to which gendered rules within marriage have actually become weaker or more equal. The study of money management is complex, because money in households is a lot more than its use in financial exchanges (Zelizer, 1989; Singh, 1997). How money is managed has symbolic meaning in marriage. The same system of management can have different meanings and outcomes depending on the gender of the person in charge. Income contribution is different from money management, and management is not the same as control or power. Money is not simply money. Rather, it symbolizes and is a window into complex social dynamics and institutions. As such, the management of money in households holds continuing interest and promise within sociology.