Abstract: Pareto efficiency is a core assumption of most models of the household. We test this assumption using a new dataset covering the retirement saving contributions of 1.3 million U.S. couples. While a vast literature has failed to reject household efficiency in developed countries, we find evidence of widespread inefficiency in our setting: retirement contributions are not allocated to the account of the spouse with the highest employer match rate. This lack of coordination cannot be explained by inertia, auto-enrollment, or simple heuristics. Instead, we find that indicators of weaker marital commitment correlate with the incidence of inefficient allocations.
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