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Economic decision-making by cohabitors: findings regarding income pooling

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  • Anne Winkler

Abstract

Cohabitation rates are increasing in the US but little is known about how cohabitors make economic decisions. For instance, do female cohabitors treat their male partner's income as shared household income when choosing hours worked? Does income sharing differ among types of cohabitors? This study investigates whether or not cohabitors pool income by drawing inferences from a generalized model of labour supply. The empirical work uses data from the 1993 Current Population Survey and the 1987 National Survey of Families and Households. These data sets provide evidence that cohabitors, taken as a group, do not pool all income. However, there is also evidence that cohabitors are not homogeneous in their behaviour; income pooling is not rejected for cohabitors in longer-term relationships and for those who have a biological child together.

Suggested Citation

  • Anne Winkler, 1997. "Economic decision-making by cohabitors: findings regarding income pooling," Applied Economics, Taylor & Francis Journals, vol. 29(8), pages 1079-1090.
    • Handle: RePEc:taf:applec:v:29:y:1997:i:8:p:1079-1090
    DOI: 10.1080/000368497326471
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    1. R. A. Moffitt & R. Reville & A. E. Winkler, "undated". "Beyond single mothers: Cohabition, marriage, and the U.S. welfare system," Institute for Research on Poverty Discussion Papers 1068-95, University of Wisconsin Institute for Research on Poverty.
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    1. Fenaba Addo, 2014. "Debt, Cohabitation, and Marriage in Young Adulthood," Demography, Springer;Population Association of America (PAA), vol. 51(5), pages 1677-1701, October.
    2. J. Gimenez-Nadal & Jose Molina & Almudena Sevilla-Sanz, 2012. "Social norms, partnerships and children," Review of Economics of the Household, Springer, vol. 10(2), pages 215-236, June.
    3. Frank W. Heiland & Shirley H. Liu, 2006. "Family structure and wellbeing of out-of-wedlock children," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 15(4), pages 61-104.
    4. Susan Averett & Laura Argys & Julia Sorkin, 2013. "In sickness and in health: an examination of relationship status and health using data from the Canadian National Public Health Survey," Review of Economics of the Household, Springer, vol. 11(4), pages 599-633, December.
    5. Mir Ali & Olugbenga Ajilore, 2011. "Can Marriage Reduce Risky Health Behavior for African-Americans?," Journal of Family and Economic Issues, Springer, vol. 32(2), pages 191-203, June.
    6. Susanne Elsas, 2013. "Pooling and Sharing Income within Households: A Satisfaction Approach," SOEPpapers on Multidisciplinary Panel Data Research 587, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. repec:pri:crcwel:wp07-02-ff is not listed on IDEAS
    8. Kulic, Nevena, 2013. "The type and duration of family unions and income sharing: The implications for women's economic well-being," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 7-15.
    9. Shirley H. Liu & Frank Heiland, 2012. "Should We Get Married? The Effect Of Parents' Marriage On Out‐Of‐Wedlock Children," Economic Inquiry, Western Economic Association International, vol. 50(1), pages 17-38, January.
    10. Julie L. Hotchkiss & Robert E. Moore & Fernando Rios-Avila & Melissa R. Trussell, 2017. "A tale of two decades: Relative intra-family earning capacity and changes in family welfare over time," Review of Economics of the Household, Springer, vol. 15(3), pages 707-737, September.
    11. Matthew Painter & Jonathan Vespa, 2012. "The Role of Cohabitation in Asset and Debt Accumulation During Marriage," Journal of Family and Economic Issues, Springer, vol. 33(4), pages 491-506, December.
    12. Audrey Light, 2004. "Gender differences in the marriage and cohabitation income premium," Demography, Springer;Population Association of America (PAA), vol. 41(2), pages 263-284, May.
    13. R. Swaby & A. O. Abdulkadri, 2007. "Should husband and wife really pool their incomes?," Applied Economics Letters, Taylor & Francis Journals, vol. 14(11), pages 813-816.
    14. Nicole Hiekel & Aart C. Liefbroer & Anne-Rigt Poortman, 2014. "Income pooling strategies among cohabiting and married couples," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 30(55), pages 1527-1560.
    15. Samantha Marie Schenck, 2019. "Labor Force Attachment and Maternity Leave Usage of Cohabiting Mothers in the United States," Journal of Family and Economic Issues, Springer, vol. 40(4), pages 729-746, December.
    16. Martin Dooley & Ellen Lipman & Jennifer Stewart, 2005. "Exploring the Good Mother Hypothesis: Do Child Outcomes Vary with the Mother's Share of Income?," Canadian Public Policy, University of Toronto Press, vol. 31(2), pages 123-144, June.
    17. Frank Heiland & Shirley H. Liu, 2005. "Family Structure and Wellbeing of Out-of-Wedlock Children: The Significance of the Biological Parents' Relationship," Working Papers 0612, University of Miami, Department of Economics, revised Sep 2006.
    18. Agnese Vitali & Romina Fraboni, 2022. "Pooling of Wealth in Marriage: The Role of Premarital Cohabitation," European Journal of Population, Springer;European Association for Population Studies, vol. 38(4), pages 721-754, October.
    19. Vogler, Carolyn & Brockmann, Michaela & Wiggins, Richard D., 2008. "Managing money in new heterosexual forms of intimate relationships," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(2), pages 552-576, April.
    20. Jonathan Vespa & Matthew Painter, 2011. "Cohabitation History, Marriage, and Wealth Accumulation," Demography, Springer;Population Association of America (PAA), vol. 48(3), pages 983-1004, August.
    21. Lawrence Berger & Maria Cancian & Marcia J. Carlson & Daniel R. Meyer & Quentin Riser & Nora Cate Schaeffer, 2024. "Defining the ‘Resource Unit’ for Poverty Measurement in Complex Contemporary Households: It’s Complicated," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 43(2), pages 1-30, April.
    22. Maria Cancian & Daniel Meyer, 2014. "Testing the Economic Independence Hypothesis: The Effect of an Exogenous Increase in Child Support on Subsequent Marriage and Cohabitation," Demography, Springer;Population Association of America (PAA), vol. 51(3), pages 857-880, June.

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