Marriage (Still) Matters for How Couples Share Finances

Is it really all that surprising that cohabiting couples are more likely than married couples to separate at least some of their income and assets? Patrick Präg, Katia Begall, and Judith Treas, authors of a recent research paper, presumed that this “marriage-cohabitation gap” in couples’ financial management strategies would depend on country context. Instead, they found that married individuals differed from cohabitants to about the same degree across a very wide range of countries.

I think I understand why the rise of cohabitation doesn’t make cohabitation more like marriage when it comes to income pooling. My cousin “Frank” had his wedding reception in his home—a beautiful, modern home in the mountains, where several dozen people could mingle and celebrate. His new wife’s little girl had her very own bathroom in a “princess suite” upstairs, as they had moved in months before.

Interest rates kept dropping after the wedding, so their banker suggested that they retitle the home in both of their names when refinancing. But when Frank refused, his wife was devastated. She thought that their married family had a kind of stability that seemed inconsistent with Frank’s refusal to title the house in both their names. It seemed to her like he was saying that they weren’t really married—and that she and her daughter could be booted out of the house just as easily as they could have been when they were cohabiting.

According to Präg and his colleagues, “the symbolic and normative value of making a public commitment to a life partner may actually increase when cohabitation exists as an accepted alternative to marriage.” In other words, the rise of cohabitation doesn’t mean that people view it the same as marriage. So my cousin’s wife wasn’t really crazy for feeling like a refusal to put the house in joint tenancy was a symbolic threat to their relationship in a way that his owning the house alone hadn’t been before they married.

It seems to me that this research deserves comment more for what the authors expected to find than for what they found. The idea that cohabitation becomes more like marriage when it becomes more common rests on the idea that marriage doesn’t have much causal impact on people’s lives, and that what really matters is the individuals’ commitments to one another, not whether they have “a piece of paper.”

If marriage does not really change anything, then cohabitants and marrieds could still look very different for reasons other than the piece of paper. Consider how institutionalization and selection might matter here. First, institutionalization. Where cohabitation is common, this theory goes, societal approval is generally higher and stigmatization correspondingly lower: cohabitants do not differ because of minority stress. Cohabiting couples can also gain from legislation protecting their rights upon separation that is more common (though hardly universal) in countries where cohabitation is widespread.

Second, selection. The idea here is that when any process involves about half the population at some point in their lives, those who participate are pretty typical. Therefore, under this theory, the assumption that co-resident couples should pool their resources will be about the same between cohabitants and marrieds because both have typical values. Contrast that with how values might differ where a particular type of person was selected into one legal status or the other (e.g., only highly individualistic people cohabiting where it is rare enough to fly in the face of social norms or, conversely, only people who hold marriage to be a sacred institution not cohabiting where it is socially approved and/or expected.)

Both institutionalization and selection would seem to predict a smaller cohabitation gap in income pooling where cohabitation was normative, which is exactly what the authors were expecting to find. But that was not the case. They also thought that a context of high divorce rates would narrow the cohabitation gap by making married people more wary of completely joint finances, just like cohabitants already were. Again, this is not what they found. Finally, they predicted women’s economic independence would narrow the cohabitation gap by making it more common for everybody to have individual assets. Again, no.

Instead, Präg and colleagues found that the rates of all of these contextual factors—cohabitation, divorce, and women’s economic independence—did matter in explaining overall financial behavior, but that cohabitants and married people were still quite distinct across contexts. In fact, because childless couples seemed to respond the most to contextual factors while marrieds were relatively unaffected, the cohabitation gap was larger in countries where the authors assumed it would be smaller.

My cousin's wife believed there was something about marriage and resource pooling that went hand-in-hand. This new study indicates that she’s not alone. There is no doubt that the meaning of cohabitation varies among cohabitants and across countries, but focus groups in 10 countries have all described marital relationships as more committed than cohabitations. I suggest that commitment is part of the definition of marriage, and that financial pooling is an expression of that commitment that can’t be easily jettisoned. Frank might have thought he was protecting his house by not sharing it legally with his new wife, but she found their legal union status incompatible with not sharing their home.

I am not denying that some cohabiting couples seem almost indistinguishable from marrieds. In fact, the authors of the current study found that cohabiting couples who had been together longer or who had children together behaved more like married people in their financial arrangements. However, I am suggesting that marriage changes most people and their expectations for sharing every part of their lives. I think that’s why Präg and his co-authors found that relationship duration and children did not affect most married people’s financial management: marriage was probably sufficient to change these things on its own.