Behind the negotiations: Financial decision-making processes in Spanish dual-income couples

Abstract

This article focuses on how dual-income heterosexual couples make financial decisions. Dual-income households have increased considerably in the last three decades in most developed countries. The study was based in Spain and involved qualitative interviews with couples, with each couple interviewed together and separately. This innovative technique allows researchers to study financial decision-making processes and to detect gender inequalities that may appear during negotiations. Analysis of decision making among the couples in the sample provides evidence that, despite claims of equality, not all decisions are negotiated or made by consensus. On the contrary, decisions are often the consequence of established social norms, and, frequently, there are issues that couples exclude from negotiation.

Keywords:

• Money
• dual-earner couples
• family
• gender inequality
• intra-household allocation
• JEL Codes: A14, B54, D1

Acknowledgments

I would like to thank the German Research Foundation, the Instituto de la Mujer Español (Ministry of Labor), and the Instituto Asturiano de la Mujer for the funding of several phases of the project “Couples, Money and Individualization” on which this article is based. My gratitude to my colleagues in this project, particularly Capitolina Díaz-Martínez, Marta Ibáñez-Pascual, and Cecilia Díaz-Méndez, for the working time that we shared and for being responsible for much of the inspiration for my research. In addition, I owe thanks to the couples that participated in this research for sharing their time with us and for allowing us an insight into aspects of their conjugal life that tend to remain hidden. I am also very grateful to the editors and the anonymous referees for their valuable comments, to Paula Ferán and Bill Bradley for their helpful reading and suggestions, and to Carmen Pérez Ríu for her help with the translation.

Notes

¹Modern society refers to a model established in Western societies after the Industrial Revolution, built upon scientific progress and based on the separation between paid work and housework and a traditional gender role system. Late modernity, reflexive modernity, or post-modernity, depending on the author, refers to the last stage of this model that appeared in western societies at the end of the twentieth century. Late modernity is characterized by individualization, family changes, loss of faith in scientific knowledge, worries about ecological issues and the enormous influence of social change in daily life, among other issues (Beck, Giddens, and Lash 1995: 7–8). Thus, we are witnessing an important change in intimate relationships and family life in Western societies, as well as liberation from traditional gender roles. Besides, options and individual choices have increased. People can make decisions about their jobs, a place to live, whether to have a partner or not, their lifestyle, whether to have children or not, housework distribution, etc. This could also be a source of conflict inside the relationship and lead to increasing risk and uncertainty, as Beck, Giddens, and Lash (1995) point out.

²The economic activity rate in the European Union in 2005 reached 56.3 percent for women and 71.3 percent for men. In Spain, the female employment rate has increased considerably since 2000, but it still amounts to 51.2 percent. Only Malta, Italy, Greece, Poland, Slovakia, and Hungary present a lower female employment rate than the Spanish one (Eurostat 2006). The Spanish male employment rate is 75.2 percent. The difference between men's and women's employment rates in Spain (24 percentage points) is one of the greatest in the European Union. However, among economically active women, almost 75 percent have full-time employment in spite of also holding most of the available part-time jobs (24 percent of Spanish women workers have part-time employment as compared to 4.7 percent of men). This last pattern conforms to the tendencies found in other Western countries (Eurostat 2006).

³The reconstructed family, also called patchwork family, is a pattern in which family links are established from successive relationships. These relationships may involve cohabitation or not, not only with the new partner but also with the children the couple shares and children and/or relatives from previous relationships.

⁴The Project “Couples, money and individualization” was initiated by the Research Centre 536 on Reflexive Modernization under the chairmanship of Ulrich Beck at the University of Munich and initially financed by the German National Science Foundation (SFB 536, Project B6). The findings of the project in Spain have been published in Capitolina Díaz-Martínez, Cecilia Díaz-Méndez, Sandra Dema-Moreno, and Marta Ibáñez-Pascual (2004), and the results of the international comparison are published in Janet Stocks, Capitolina Díaz-Martínez, and Björn Halleröd (2007).

⁵Some of the statements were:

1. It is good for children to see that their mother has a job outside the home apart from carrying out the household chores.

2. If the female partner has a better job than the male partner, the man should take up more responsibility for household chores and childcare even if he has to reduce his own professional working hours.

3. A married woman should not take up paid employment if employment rates are low, and her husband is able to support the whole family on his own.

⁶By this term, we mean the issues that either the man or the woman excludes from negotiation and those decisions for which couples do not establish an explicit negotiation process but which result from an implicit or silent one.

⁷For further discussion of the ethical implications and the methodologies applied in this project, as well as for a comparison between Sweden, Spain, and the US, please refer to Stocks, Díaz-Martínez, and Halleröd (2007).

⁸The concept of middle-class that is used in this project takes into account the occupation of the interviewees and also other cultural factors, such as education and lifestyle. Therefore, we interviewed professionals with a medium-high educational background (such as teachers, engineers, white-collar workers, officers at the public sector) as well as people with a lower educational level, such as employees in the service sector (salespersons, shop assistants, bank assistants) and even self-employed workers running their own small business. Almost all interviewees have salaries above the national average-wage in Spain and in the cases in which their income was lower their high cultural level seemed to make up for the situation. This is the case of a woman who held a university degree with a low-wage first job or the case of a man who chose to work part-time to be able to do other kinds of artistic activities that satisfied him more than his occupation.

⁹At the beginning of the project we had the idea of doing a panel with three stages. The US team revisited their couples three years after the initial interview and interviewed eight of them (eight of the forty-four interviews conducted in the US were held during a second round). In Sweden one of the interviews is missing because it involved a man that declined the individual interview.

¹⁰By homogamy, we mean couples made up of two people with similar social, economical, and cultural levels.

¹¹Matrimonial laws in Spain establish that both spouses are joint owners of any goods acquired by either of them from the marriage, which will be equitably allotted in case of divorce, except in case of previous agreements. In Catalonia, on the contrary, each partner's goods belong to him or her, whether or not they are married, unless they establish a specific agreement.

¹²The names of the people interviewed have been changed to guarantee their anonymity. We use the same initial letter in the names of the man and the woman of each couple in order to identify them. At the end of the interview excerpts we include either the name of the person if it was an individual interview or both names in the case of couple interviews.

¹³In this model, the woman is responsible for managing all the household finances and is also responsible for all expenditures, except for the personal spending money of the other partner (Pahl 1989: 67–68).

¹⁴“Important decisions” concern large purchases and durable goods, such as the mortgage; whereas daily decisions refer to everyday expenses. This question has theoretical implications that are explained later in this paper in the section entitled “Personal interests and family interests.”

¹⁵Please consult endnote 14 to see the difference between important and daily decisions.

¹⁶According to the Spanish Sociological Research Centre, 64.6 percent of the Spanish population agreed that the ideal family was one in which both the woman and the man worked outside the home and shared household chores and childcare tasks. 17.8 percent preferred a couple in which the woman worked less hours outside the home than the man and took care of the household and dependent persons, and 15.8 percent preferred the traditional family model of breadwinner and housewife (Centro de Investigaciones Sociológicas (CIS) 2003).