For Love and Money? the Impact of Family Structure on Family Income

Article excerpt

Summary

What do the half-century decline in U.S. marriage and the attendant rise in single parenthood mean for the economic well-being of children, especially children living in single-parent families?

Adam Thomas and Isabel Sawhill show how differing living arrangements can be expected to affect families' economic well-being. Married-parent and cohabiting households, for example, can benefit from economies of scale and from having two adult earners. The availability of child support for single-parent families and the marriage penalties in the tax and transfer system reduce but rarely completely offset the economic benefits of marriage.

Consistent with these expectations, national data on family income show that across all races and for a variety of income measures, children in lone-parent families (single-parent households with no cohabiter) have less family income and are more likely to be poor than children in marriedparent families. Cohabiting families are generally better off economically than lone-parent families, but considerably worse off than married-parent families.

Thomas and Sawhill acknowledge the possibility that the link between family structure and family resources may not be causal. But new research that simulates marriages between existing single mothers and unattached men with similar characteristics suggests that family structure does affect family resources and that child poverty rates would drop substantially if these mothers were to marry.

It does not necessarily follow, however, that policymakers ought to, or even can, do anything about family structure. Marriage is not an economic cure-all for the complex problem of child poverty. It would be a mistake for policymakers to focus on promoting marriage to the exclusion of encouraging and rewarding work or addressing problems such as early out-of-wedlock childbearing. Still, Thomas and Sawhill conclude that a continuation of recent declines in single parenthood, linked most recently to declines in teen and out-of-wedlock births, offers great promise for improving the economic welfare of U.S. children.

The American family has undergone considerable change over the past several decades. Between 1970 and 2002, the share of children living in two-parent families fell from 85 percent to 69 percent, while the share living in single-parent families more than doubled, from 11 percent to 27 percent. It is now estimated that more than half of all children in the United States will spend all or part of their childhoods in single-parent families. (1) Among such families, cohabitation--a single parent and his or her children living with an unmarried partner--has become increasingly common. About two-fifths of all children born in the early 1990s will spend at least some time in a cohabiting household. (2) Many analysts and policymakers view the decline in marriage and the attendant rise in single parenthood with concern because children in single-parent families tend to have substantially fewer financial resources and are more likely to be poor than children in married-parent families. (3)

Implicit in this concern is the belief that living arrangements affect children's economic well-being. But such a claim raises many questions. Have the decline in two-parent families and the increase in single-parent families increased poverty among children, or could poverty be a cause rather than a result of single parenthood? If policymakers could reverse the decline in marriage, what might be the economic effects of an increased marriage rate among low-income families with children? How does the increasing prevalence of cohabitation affect children's economic status? This article will take up these questions, examining evidence on the implications of changes in family structure for the incomes of families with children.

In general, our review suggests that increases in single parenthood have in fact reduced children's economic well-being. …