Executive summary
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Researchers from many disciplines are re-examining how couples negotiate and manage their economic activities, paying particular attention to the resources, interests, and preferences unique to each spouse or partner. One theme in this work is the weight that spouses or partners attach to individual interests versus joint interests in their decisions.
On the basis of data from the 2007 General Social Survey, this paper provides an examination of the income management strategies used by older Canadian couples, focusing on those in which at least one spouse or partner is aged 45 or older. Specifically, the study examines the extent to which couples use an allocative strategy of income management, in which one spouse or partner manages the couple's income and allocates a share to the other; a pooled strategy, in which both spouses or partners pool their incomes, with each taking out what she or he needs; or a separate-income strategy, in which the spouses or partners keep their incomes partially or completely separate.
Among the sample of individuals in 'older' couples, 20% use an allocative income management strategy, 57% use a pooled strategy, and 23% use a separate-income strategy (with 8% of couples partially and 15% of couples completely separating their incomes). Separate-income strategies are more prevalent among common-law couples than among married couples—a raw difference of almost 34 percentage points. A considerable portion of this difference (42%, or 14 percentage points) is attributable to socio-economic characteristics that systematically differ between married and common-law couples. The extent to which these characteristics account for between-group differences has not received much attention in the literature. In addition to being linked to common-law status, separate-income strategies are more prevalent among couples in relationships of shorter duration and in which children are not present.
The prevalence of separate-income strategies is greater among couples in which one or both spouses or partners have a post-secondary educational credential. Income management strategies are generally not associated with the amount of income received by the husband or male partner. However, the likelihood of using a separate-income strategy is strongly correlated with the income of the wife or female partner. The likelihood of using a separate approach to income is about 5 percentage points higher among couples in which wives or female partners have incomes o $20,000 to $39,999 and about 8 to 12 percentage points higher among couples in which wives or female partners have incomes over $40,000 than among couples in which the wife or female partner has an income of $1 to $19,999. However, while the likelihood of using a separate approach to income management is strongly and positively correlated with the wife's absolute income, it is not correlated with her income relative to that of her spouse or male partner.
The growing number of Canadians in second marriages and blended families raises the question of whether complex families have complex finances. Descriptive results are suggestive of such a relationship, with the use of separate-income strategies more prevalent among individuals in blended families and among those with prior marriages. However, these results are not significant in multivariate models.
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