How Does Workfare, Labelling, Transparency and Approval Rules Affect Spousal Financial Decision Making

Researchers: Michael King, Tara Bedi, Anu Puthenmadathil Jose

Partners: Research project funded by ING, Trinity College Dublin and the Irish Research Council and the European Union’s Horizon 2020 research and innovation programme under the Marie Sklodowska- Curie grant agreement no. 713278

Location: Kolkata, India

Sample: 1,000 couples

Timeline: 2020-2021

Theme: Financial Inclusion and Gender

Description:

This study revisits the topic of joint accounts and assesses how their terms, increasingly varied due to innovations in the fintech sector, affect allocation decisions. Through an experimental setting we assess the impact of labelling, transparency and spousal approval on expenditure allocations of spouses. We also assess the impact of personally earning money on subsequent expenditure decisions of couples under different joint account terms. To achieve this, we conduct lab-in-the field experiment with a total of 1,000 couples. At the lab we collect behavioural/demographic characteristics (including preferences, decision making and bargaining power) for both spouses. Using a two-stage randomisation, we first randomise couples into a ‘task’ or a ‘gift’ stream, before randomising 200 couples into each of five treatment arms with differing joint account terms, under which spouses are asked to complete an allocation decision. We derive important insights in three ways as follows; (1) insights that inform consumers about how best to structure their finances between individual and joint accounts, (2) insights for traditional banks on how they might allow greater flexibility in terms and (3) insights for the fintech sector on how within account labelling, transparency and approval rules affect spousal decision making.