Abstract
Abstract Traditionally, households have been regarded as single units when it comes to savings. Although this might be correct for some kinds of household savings, we question the accuracy of this unitary model with respect to non-mandatory retirement savings. To do so, we analyze the intra-household allocation of retirement savings between partners in Germany through an individualistic approach. First, the decision to save at all is analyzed using a seemingly unrelated bivariate probit model, showing that the possession of retirement saving accounts among spouses is positively correlated, hinting at a “crowding-in” of saving accounts. However, this could only be due to certain tax-related reasons. Thus, we further analyze the interaction of savings between spouses using three-stage least squares, allowing for endogeneity between the spouses’ savings. These results additionally show a crowding-in of the total amount of retirement savings between spouses, probably due to some “peer effect”. We therefore conclude that the unitary model of household decision-making is not applicable with respect to retirement savings.
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