Academic journal article Journal of Marriage and Family

How Do Cohabiting Couples with Children Spend Their Money?

Academic journal article Journal of Marriage and Family

How Do Cohabiting Couples with Children Spend Their Money?

Article excerpt

Increasing rates of cohabitation in the United States raise important questions about how cohabitation fits in with the definition of family. Answers to this question depend in part upon the extent to which cohabitors' behavior differs from that of other family types. Using data from the Consumer Expenditure Survey, we compare the expenditure patterns of cohabiting-parent (n = 1,804), married-parent (n = 33,159), divorced single-parent (n = 7,641), and never-married single-parent (n = 2,893) families. We find that cohabiting-parent families, compared to married-parent families, spend a greater amount on 2 adult goods (alcohol and tobacco) and a smaller amount on education. Cohabiting-parent families also differ in their spending patterns from divorced single-parent families and from never-married single-parent families. Overall, our results show that cohabiting-parent families allocate their budgets differently than do other families.

Key Words: alcohol, cohabitation, expenditure, family structure, tobacco.

Cohabitation is an increasingly prevalent living arrangement in the United States gaining progressively more attention from policymakers and family researchers. For example, recent policy proposals to encourage marriage, such as the Administration for Children and Families' Healthy Marriage Initiative, are motivated partly by the rise in cohabitation and the view that cohabitation does not adequately promote the well-being of children (Administration for Children and Families, Department of Health and Human Services, 2004). At the same time, some authors have explored whether this demographic shift illustrates the declining significance of marriage as a union status and as a setting for childrearing (Bumpass & Lu, 2000). Either way, increasing rates of cohabitation raise important questions about how cohabitation fits in with the definition of family (Seltzer, 2000). Answers to this question depend in part upon the extent to which cohabitors' behavior and characteristics differ from those of married couples and single parents, perhaps especially in terms of the environment that each type of family provides for children's development.

The fraction of children born to unmarried mothers has increased dramatically in the past 20 years. Most of this increase is associated with an increase in those born in cohabiting two-parent families, though it is also a result of their mother's entry into a cohabiting union (Bumpass & Lu, 2000). Current estimates suggest that about 40% of all children will spend some time in a cohabiting-parent family before age 16 (Bumpass & Lu). This descriptive paper extends our knowledge of cohabitors' behavior by examining the expenditure patterns of cohabiting couples with children. Examining expenditure patterns is one way to assess the extent to which cohabiting-parent families behave like other types of families. It also provides insights into choices that parents make, which could indicate tastes and values that reflect different parenting priorities. Specifically, we investigate how cohabiting-couple families spend their money; that is, what is the composition of the goods that they purchase? We compare these spending patterns to those of married-parent families and two types of single-parent families. Our analysis focuses on the expenditure patterns of families with children because much of the public policy debate over the increasing rates of cohabitation has centered on the implications for child poverty (e.g., Carlson & Danziger, 1999; Kenney, 2004).

BACKGROUND

A small number of studies suggest that spending patterns may differ by family structure. Case, Lin, and McLanahan (2000) found that families with a nonbiological mother (a step, adoptive, or foster mother) spend less on food than other two-parent families. Case and Paxson (2001) found similar patterns for health investments. Paulin and Lee (2002) showed that single mothers are much more likely to purchase apparel and services for children than are single fathers. …

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