Does the Balance of Power Within a Family Matter? The Case of the Retirement Equity Act

Saku Aura ()

No 734, CESifo Working Paper Series from CESifo Group Munich

Abstract: This paper studies within-family decision making regarding investment in income protection for surviving spouses. A change in US pension law (the Retirement Equity Act of 1984) is used as an instrument to derive predictions both from a simple Nash-bargaining model of the household and from the classical single-utility-function model of the household. This law change gave spouses of married pension-plan participants the right to survivor benefits unless they explicitly waived this right. The predictions of the classical model are rejected in favor of the predictions of the Nash-bargaining model in the data.

Date: 2002
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Related works:
Journal Article: Does the balance of power within a family matter? The case of the Retirement Equity Act (2005)
Working Paper: Does the balance of power within a family matter? The case of the Retirement Equity Act
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