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Commitment Devices In Marriage For Savings: Evidence From Japan

Author

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  • WATARU KUREISHI

    (The National Institute of Population and Social Security Research, Hibiya Kokusai Building, 6th Floor, 2-2-3 Uchisaiwaicho, Chiyodaku, Tokyo 100-0011, Japan)

  • MIDORI WAKABAYASHI

    (Graduate School of Economics and Management, Tohoku University, 27-1 Kawauchi Aobaku, Sendai, Miyagi 980-8576, Japan)

Abstract

We empirically test the hypothesis that, for married individuals with time-inconsistent preferences, leaving the management of family budgets to their spouse functions as a commitment device for savings. We conduct a cross-sectional analysis based on the micro-data of married Japanese couples obtained from waves 2009 and 2010 of Osaka University’s Preference Parameters Study. Our results show that when wives have time-inconsistent preferences, their household savings are more likely to go as planned if they leave household budgets to their husbands in comparison to when they make these decisions themselves. However, time-inconsistent individuals do not actively use leaving the management of family budgets to their spouse as a commitment device for savings. Considering these, we conclude that individuals do not recognize the benefits of leaving the management of family budgets to their spouse, but it can work as a commitment device.

Suggested Citation

  • Wataru Kureishi & Midori Wakabayashi, 2023. "Commitment Devices In Marriage For Savings: Evidence From Japan," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(03), pages 1031-1058, June.
    • Handle: RePEc:wsi:serxxx:v:68:y:2023:i:03:n:s0217590819500383
    DOI: 10.1142/S0217590819500383
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    More about this item

    Keywords

    Time-inconsistency; self-control; under-savings; commitment devices;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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