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Women's and men's money: what difference does it make?

posted by Viviana Zelizer

Last Sunday, the New York Times business section reported the increased economic muscle of US women, married and single. Women, the Times notes, are not only earning more but spending their money in previously male consumer territory: purchasing homes, cars, consumer electronics, and financial services.

Let's be careful about what we infer from this trend. Does it mean that household economies have become gender-neutral? That household economic decisions and practices no longer divide by gender? Probably not.

It's certainly true that US women are acquiring greater power over household decisions and extending that power over a larger range of consumer goods and services. But there are considerable reasons for doubting that the gendered household division of labor is about to vanish. In fact, substantial research shows persistent gender differences not only in the amount of money earned by men and women, but in how they earn that money, in who handles household finances, and even more intriguing, in how they spend it.

Recall Muhammad Yunus' micro-credit program discussed yesterday. Most of Grameen Bank's small loans recipients are women. Why? Reportedly, Yunus found not only that women repaid loans more often than men but that when women controlled the money, families were more likely to benefit from the income. Based on their own investigations, sociologists, economists, and policy experts have reached similar conclusions: direct transfers to women, including welfare payments, are more apt to be earmarked for their children's needs.

Other types of gendered patterns in household economic behavior appear across social classes and ethnic groups. Just today, the New York Times (November 1), describes the complex arrangements made by working mothers who go on business trips but still manage household finances for their time away. Stacy Hirsh, a mother of two children, works in the marketing and business development division of a financial services company in Manhattan. Before leaving on a business trip, the article reports, among other tasks, Hirsh prepares checks made out to the piano teachers and cash for the housekeeper. Other mothers post lists of household tasks for their husbands and baby sitters.

Meanwhile, in immigrant families, such gender differences in economic activity often lead to marital conflict. Wives who discover greater autonomy and household power after migration insist on purchasing homes, home furnishings, and other durable goods ensuring long-time residence in the U.S. Their husbands, on the other hand, less enthusiastic about the new household democracy, often opt to save funds destined for their eventual return to their homeland.

As readers of this blog may well already know, Debb Thorne's interviews with bankrupt couples uncovered a remarkable gender pattern among families facing bankruptcy: husbands withdrew, while their wives assumed the household's financial dirty work. Many husbands, for example, refused to answer the telephone as bill collectors started hounding them. They kept themselves ignorant of current finances, and left all the legal work to their wives. As one husband told Thorne:

I'm so bad, I mean, I love my wife, but I have to admit I was bad. They'd [bill collectors] call and I'd say "Oh, I'm sorry, he's not here right now" or, "she's [his wife] right here."

Many wives, therefore, found themselves in charge of keeping careful records, juggling bills, holding off hostile bill collectors, taking the initiative to file for bankruptcy, and then dealing with the arduous legal paperwork.

When couples on a drive get lost, women tend to do the asking for directions because men are reluctant (or too embarrassed) to admit their failures as map readers. Similarly, it looks as if when things go wrong in credit and bankruptcy, women in households specialize in managing external relations.

Considering women's increased involvement in families facing bankruptcy, it would be important to find out what deliberate changes take place in consumption and possessions among such families. Which items for instance are people more likely to sacrifice and sell? Which items do they hold on to? How does that differ by gender? Considering strong evidence showing that mothers are more likely than fathers to allocate money for their kids' consumption, one might expect for instance, that mothers will struggle to preserve more of the dwindling income for children and households and less for external display. Students of credit and bankruptcy should stay alert to differences in the ways that men and women deal with financial stress. They matter to household welfare.


My experience as both a direction-giver and direction asker has led me to not stop and ask for directions on the basis that it's mostly a waste of time, because the directions-giver either doesn't know the place you're trying to get to, or sends you the wrong way.

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