JOINT ECONS – S&P: The Silent Treatment? Imperfect Correlation of Spousal Expectations and Communication Frictions; Professor Adeline Delavande (University of Technology Sydney)

Abstract

Collective models of household decision-making typically assume that partners share information perfectly and hold similar expectations. We conducted a survey of 2,200 middle-aged spouses to test the hypothesis of expectations alignment and quantity the extent of information sharing. Our focus is on expectations about Social Security benefits. Our descriptive analysis reveals that only a minority of couples have similar expectations about a given spouse’s benefit: only 35% of the couples have a difference in monthly benefit expectations smaller than $100, with an overall correlation of 0.68. We then provide causal evidence on sharing of information within couples by leveraging a randomized information provision combined with a sequential survey design within spouse. The treatment leads the index spouses to revise their expectations substantially and reduces the absolute perception gap between Social Security benefits expectations and the forecast provided as treatment by about 22 percentage point (39% of the baseline gap). We further explore whether this information spills over to the second spouse. Consistent with some information sharing, having a treated spouse leads to a secondary spouse having an absolute gap that is 10-12pp lower. These spillovers are larger when the first spouse finds the information credible, when they the financial decision-maker, when they learn that own benefits are lower than anticipated, and when spouses agree on their marital satisfaction.