Stable families, prosperous economy

The American Enterprise Institute published a  new report earlier this week on the importance of marriage in the growth of family incomes. The topline data point that many news organizations picked up was this—“family incomes would be 44 percent higher if Americans weren’t shying away from the altar,” as U.S. News & World Report put it. The authors of the report— Urban Institute economist Robert I. Lerman and University of Virginia sociologist W. Bradford Wilcox, a visiting scholar at AEI—marshaled an impressive array of new data to examine the importance of family structure on rising income inequality in the United States.

Equally important is the need for further research on whether and how income inequality fosters the conditions that make achieving strong, stable marriages difficult for more and more Americans. Marriages do not happen in an economic vacuum, and inevitably must be sustained amid tough economic times. What’s more, the increasing diversity of family structures means these kinds of economic issues are important for all adults, regardless of marital status.

Research on how economic inequality affects the prospects for marriage among low- and middle-income Americans points to several equally telling trends. Economists Eric Gould at the Center for Economic Policy Research and Boston University’s M. Daniele Paserman detail that marriage rates fall in cities where wage inequality is highest. Economists Melissa S. Kearney at the University of Maryland and Phillip B Levine at Wellesley College find that the proportion of young women having children out of wedlock is greatest in cities with the highestincome inequality. And economist David S. Loughran at the Rand Corporation finds that rising male wage inequality explains 7 to 18 percent of the fall in marriage for white women between 1970 and 1990.

In short, growing economic uncertainty and wage stagnation among the bottom 90 percent of income earners means greater family instability.  Indeed, sociologists Kathryn Edin at Johns Hopkins University and Maria Kefalas at St. Joseph’s University find that the main reason unmarried women hesitate to marry—even if they have a stable partner—is because they see family economic instability and the fear of divorce as a bigger threat than being single. What’s more, Levine and Kearney also find that out-of-wedlock teen pregnancy is often driven by economic despair.

The release of yesterday’s AEI report by Lerman and Wilcox is a timely reminder that marriage matters amid the swift-changing economic landscape for most families in the United States, but we must also keep in mind that economic inequality plays a big role in the decline in marriages. Without question, families today are more financially and socially unstable than they were 40 years ago, when the rise of economic inequality to near Roaring Twenties-levels today first began. And this instability is now part of a feedback loop that makes it more likely for the next generation of American families to be even more stressed and increasingly not married.

But there are policies that those across the political spectrum can agree on—policies that could create  conditions that foster healthy relationships and family life.  Lerman and Wilcox’s paper provides an excellent starting place for a conversation about an economic policy agenda that supports strong and stable families. In particular, their recommendations regarding the expansion of the earned income tax credit and the child tax credit merit more attention because they have the potential to incentivize work and stabilize the economic lives of low- and middle-class Americans. Similarly, the recommendation to expand vocational education and apprenticeship opportunities for young Americans holds promise for strengthening the employment and earnings prospects of low and moderate income Americans, especially men.

Additional ideas belong on the table as well. A higher minimum wage would boost the take-home pay of millions of young workers. Policies to address work-life conflicts (especially for young parents) would provide much-needed stability for individuals seeking to establish and maintain healthy relationship with their partner. And reliable, high-quality early child-care, preschool, and after-care would remove a major stress from many family relationships.

Then there are health and criminal issues that need addressing. Providing easy access to effective and inexpensive contraception would help prevent unintended pregnancies, allowing couples to plan stable, secure family formation. Addressing the incarceration rate and the life-long consequences of imprisonment is a key point of policy intervention as well, particularly for low-income African-American men.

On both sides of the political aisle, there are signs of a commitment to the idea of strong, stable families as a critical element of our economy’s long-term success. Yesterday’s report suggests an opening for a policy agenda that could address this challenge head-on.

October 30, 2014


Economic Wellbeing


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