Intra-Household Income Management and Couple’s Relative Sharing of Income and Environment Sustainability in Japan

Abstract

This study aims to identify household members’ income sharing, when the amount of said income is governed by a particular household member. The results are expected to provide insightful evidence that identifies who is under the poverty line within families. This will illustrate the intra-household allocation inequality by observing the members’ household income dominance. Using the information on household income management obtained from the Japanese Household Panel Survey data (1993–2013) and the original Internet survey, this paper develops an alternative methodology to estimate the household income distribution of couples. A two-step estimation process was employed to estimate the wife’s manageable income equation. Then, the parameters were substituted into the husband’s manageable income equation to estimate the parameters for calculating the wife’s sharing rule. The results are as follows. First, a wife’s share of intra-household resources positively correlates to her manageable income resources. However, wives have weak power in expending the transferred income from their husbands. Second, the remarkable feature is that, on average, wives share 37% of the resources, meaning that the wives’ relative bargaining is weaker than the husbands’. Narrowing the gap in terms of hourly wage between husbands and wives is a crucial tool to reduce the intra-household allocation gap. Third, the wives’ relative intrahousehold income allocation improvement is associated with household environment sustainability activities. To improve the intra-household income allocation inequality, we provide an original approach to explore the intra-household head of household members’ relative income sharing. The results highlight the inequality of intra-household income distribution and confirm that reducing the income gap would be a crucial improvement factor.