Loosening The Grip: Delegation of Financial Decision-Making to Spouse in Old Age

Abstract

Gender inequality in control of household finances is a well-known phenomenon. We investigate whether such imbalance also extends to the delegation of financial decision-making (FDM) responsibilities to one’s spouse in old age. This study reports the results from an incentivized delegation experiment among Australian couples of age ≥60 years. Participants were required to complete FDM tasks, which they had the option of completing independently or delegating to their spouse. The odds of women delegating to their spouse were found to be nearly 25 times higher than that of men. This gender difference in delegation was not explained by differences in financial competence, education, age, or cognitive status. The likelihood of delegation increased with the financial competence of the spouse. Individuals who had the option to delegate selectively delegated more often and earlier than those who could only delegate irrevocably. Our evidence suggests that gender norms and control play a dominant role in the delegation of FDM within older couples and can override specialization or efficiency considerations.