 Private Information in the FamilySuzanne Bellue, Matthias Doepke and Tertilt, Michèle No 21318, CEPR Discussion Papers from Centre for Economic Policy Research Abstract: Standard models of the family assume that spouses share information. In this paper, we challenge this assumption with theory and evidence. We field a new survey module in the Dutch LISS panel where spouses independently report their knowledge of each other's finances. Private information is pervasive: in 40 percent of couples, at least one partner lacks full knowledge of the other's income. We examine the implications of private information for intrahousehold risk sharing using a mechanism design approach. Our model predicts that a spouse's consumption share rises with their income share when information frictions are present but is independent of income under full information. Constrained-efficient allocations can be sustained without full revelation: each spouse chooses how much money to bring home, and hidden income is never revealed. Evidence from the LISS panel confirms the predictions: a positive relationship between income and consumption shares appears only among imperfectly informed couples. Controlling for limited commitment does not affect this result, suggesting that information asymmetries — rather than commitment frictions — drive departures from full insurance. Date: 2026-03 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:21318 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.