Prepared by:
Robert Lerman
Urban Institute and American University
This four-paper series examines the economic returns to marriage. Findings from the papers are synthesized in a Summary by Kelleen Kaye, senior analyst at the U.S. Department of Health and Human Services.
- The first paper Marriage and the Economic Well-Being of Families with Children reviews the rich literature on this topic and the remaining three papers present new empirical findings using three different data sets and a variety of statistical models.
- Impacts of Marital Status and Parental Presence on the Material Hardship of Families with Children examines types of union formation among families and their relationship to well-being.
- How Do Marriage, Cohabitation, and Single Parenthood Affect the Material Hardships of Families with Children builds on the prior work by replicating and expanding the analysis of material hardship, including the role of help from family and friends.
- Married and Unmarried Parenthood and Economic Well-Being: A Dynamic Analysis of a Recent Cohort adds a longitudinal perspective to the analysis of marriage and economic well-being and uses several techniques to control for the selectivity into marriage.
Robert Lerman is the Director of the Labor and Social Policy Center at the Urban Institute and Professor of Economics at American University. His work was funded through a grant from the U.S. Department of Health and Human Services, Office of the Assistant Secretary of Planning and Evaluation.
"Summary
By:
Kelleen Kaye(1)
Overview
This four-paper series by Dr. Robert Lerman(2) examines the economic returns to marriage. The first paper reviews the rich array of literature on this topic, and the remaining three papers present new empirical findings using three different data sets and a variety of statistical models.
One goal in undertaking the empirical research was to address two gaps evident in the literature review. One such gap is the relative scarcity of findings pertaining specifically to economically disadvantaged families. All three empirical papers pay particular attention to findings for disadvantaged families (examined using such measures as low income and low education level). Another gap in the existing research is the difficulty in controlling for selection into marriage when measuring the returns to marriage. In other words, are people with greater economic potential also more likely to get married? If so, this could overestimate the benefits of marriage if not controlled for. This issue is examined primarily in the final paper of the series.
Lerman begins by reviewing the theoretical models of the returns to marriage and points out that one cannot conclude a priori that married parent families are economically better off, particularly when compared to cohabiting parent families who also have two potential earners. He lays out a framework for testing empirically whether married parents are better off than other parents, with particular emphasis on comparison to cohabiting parents. Each paper’s contribution to this question is unique, based on the strengths of the particular data. Taken together, the results in these three papers generally provide a robust indication that married parents tend to be better off than both single and cohabiting parents, and that these benefits extend to disadvantaged families as well. The findings of each of the three empirical studies are summarized below.
The first paper detailed below uses the National Survey of America’s Families to examine the types of union formation among families and their relationship to well-being. One strength of these data is the ability to identify detailed family groups according to marital and biological status of parents. Lerman finds that married parent families with two-biological parents have lower rates of poverty and material hardship, even after controlling for other related factors, and even among families with lower education or lower incomes.
The second paper highlighted below uses the Survey of Income and Program Participation to replicate and expand upon the analysis of material hardship. In this paper, Lerman also incorporates findings on the importance of stability of income and household composition over time. His findings continue to indicate that marriage reduces the risk of hardship, even among those with lower incomes or lower education. The results further suggests that one reason for this outcome may be that married parents have more stable unions and have greater access to assistance from friends, family and community. In addition to measures of material hardship, the paper also examines well-being in terms of income-to-needs ratios, or welfare ratios.(3)
The final paper reviewed below uses data from the National Longitudinal Survey of Youth and examines poverty and welfare ratios as the primary indicator of well-being. Measures of potential disadvantage include premarital pregnancy and aptitude scores. The longitudinal nature of the data support analyses of longer-term measures of well-being and the ability to control for more characteristics of the mother prior to the birth. The author also uses techniques such as propensity matching scores and fixed effects models to control for selection into marriage. His conclusions are generally consistent with the first two papers; that marriage improves economic well-being, even among disadvantaged families and minority families.
Empirical Papers
“Impacts of Marital Status and Parental Presence on the Material Hardship of Families with Children.” The first of the three empirical studies, this paper is based on data from the 1997 and 1999 rounds of the National Survey of America’s Families (NSAF). The primary measures of family economic well-being are poverty status (above or below the poverty line) and material hardship. While poverty reflects a family’s income, hardship measures whether a family’s material needs are met. Examples of material hardship include whether phone or utilities have been cut off, whether people are doubling up in rooms, whether family members have enough to eat, and whether the family has been evicted. Lerman examines the relationship between union formation and economic well-being among families overall, and whether this relationship is different for disadvantaged families (as defined by education levels and poverty status).
The paper begins with a rich set of descriptive results showing the degree to which union formation outcomes vary by racial subgroup, and the extent to which poverty rates vary by type of family union. These results are particularly informative because they break union formation into nine different categories reflecting marital status, living arrangements and biological relationship.(4) The results generally indicate higher poverty rates among single and cohabiting-parent families as compared to married-parent families. In 1998, for example, poverty rates ranged from 6 to 9 percent for families headed by married parents, from 7 to 21 percent for cohabiting parents and from 25 to 39 percent for single parents. This relationship between union formation status and poverty also holds true when using multivariate analysis to control for other observable family characteristics, however the differential is smaller.
The paper also examines the link between union formation status and material hardship(5). Married-parent families were still better off than either cohabiting- or single-parent families, but the differential was narrower than for poverty rates, with hardship rates ranging from 15 to 22 percent for married parents, 29 to 30 percent for cohabiting, and 32 to 39 percent for single parents. This pattern generally holds true for both the simple descriptive and the multivariate results.
Part of the likely reason why married parent families are economically better off is their greater potential for generating income; however, Lerman finds that even when holding income constant, married-parent families still have a lower likelihood of material hardship than either single- or cohabiting-parent families.(6) This relationship varies somewhat depending on the degree of hardship being examined. For example, among families experiencing either difficulty with rent or with meals, married parents are better off than cohabiting parents regardless of whether there are one or two biological parents in the household. However, among families experiencing both hardships, Lerman finds that well-being ranked highest among families having two biological married parents, then two cohabiting biological parents, followed by married with one biological parent, single parents, and cohabiting with one biological parent. These findings also hold constant a variety of other family characteristics such as mother’s education.
As Lerman’s analysis points out, human capital factors such as education can have a direct impact on material hardship, and it is important to control for these factors when estimating the benefits of marriage. It is also important to see if the benefits to marriage are actually different for people with more or less human capital (i.e. parents who are more or less disadvantaged). Lerman’s findings indicate that among parents with post-secondary education, married parents are better off than either cohabiting or single parents regardless of the number of biological parents in the household. However among parents with a high school degree or less, well-being ranked highest among families having two biological married parents, then two cohabiting biological parents, followed by married with one biological parent, cohabiting with one biological parent, and finally single parents. Thus, even among parents with lower education, families headed by two married biological parents are better off than either cohabiting or single parents, but the relationship between marriage and family well-being is generally not as straight-forward as with higher educated parents, depending also on biological status.
While such detailed findings could raise a variety of interesting hypotheses, Lerman’s basic conclusion is that “being in a married, two-parent household does indeed serve as a protective device against material hardship, even among those with the same income-to-needs ratio, immigration status, race, education, age of children and adults.”
“How Do Marriage, Cohabitation and Single Parenthood Affect the Material Hardships of Families with Children.” In this second empirical study, Lerman builds on his prior work by replicating and expanding the analysis of material hardship, including the role of help from family and friends. The study also looks at the role of income available in prior years and household stability. Findings are based on data from the 1996 panel of the Survey of Income and Program Participation, covering the period from April 1996 through March 2000. As in the prior paper, Lerman examines the relationship between union formation and economic well-being among families overall, and whether this relationship is different for disadvantaged families (as defined by education levels and poverty status).
This paper begins by describing the incidence of married, cohabiting and single-parent families by race, and the household characteristics for each type of family union. The findings then turn to measures of family well-being by union formation status where well-being is captured by poverty rates, welfare ratios and material hardship. With respect to both poverty and welfare ratios, married-parent families were better off than cohabiting and single parent-families, although the impacts were slightly higher with respect to poverty rates. This relationship held true for White, Black and Hispanic families, with the returns to marriage greatest among Black families, followed by White and Hispanic families. The share of families overall having at least one material hardship ranged from 14 to 20 percent for single and cohabiting parents and 6 percent for married parents.
Lerman then turns to measuring the returns to marriage among disadvantaged families. He finds the relationship between marriage and reduced material hardship generally holds true for families below 150% of the poverty line as well. Among parents below 150 percent of poverty, the overall hardship index was nearly 70 percent greater among cohabiting and single parents compared to married parents. When looking exclusively at parents with less than a high school diploma, Lerman found similar results; the overall hardship index was between 54 and 100 percent greater for cohabiting and single parent families compared to married parent families. It should be noted, however, that for both parents with lower incomes and parents with lower education, the strength of the relationship between union status and hardship depended on the particular hardship being examined.
There are a number of reasons why material hardship may be less among married parent families even across families with similar incomes. This outcome could reflect greater union stability or commitment to long-term investments in the family, or it could also reflect greater access to resources outside the immediate family.
Lerman examines the last explanation by looking at the percent of married, cohabiting and single couples who report having access to help from family, friends or the community. In fact, reports of access to each of these types of assistance were somewhat higher among married families as compared to cohabiting or single parent families. This generally held true both for families overall, as well as families below 150 percent of poverty. Among families below poverty, the gap was particularly wide between married and cohabiting couples. For example, the percent of married parents reporting help from family was 70 percent while among cohabiting couples only 55 percent reported such assistance.
Multivariate results provide further evidence that at least some of the advantage experienced by married-parent households is attributable to greater access to help from outside the immediate family, as well as greater stability. Lerman uses a series of equations to add these factors to the model one by one. He shows that variability of welfare ratios over time, changes in household composition over time and help from friends, family and community each have a significant effect on family material hardship, and each reduces the effect that had been attributable to marital status. Nonetheless, marital status remains a significant factor in reducing hardship. These relationships held true for families below 1.5 times the poverty line as well. Among families whose household heads had less than a high school diploma the same was also true, although the differential between married and cohabiting families was weaker, as were the effects of change in household status and help from the community.
In reflecting across a broad spectrum of findings in this paper, Lerman concludes that “Married parents experience far less hardship not only than single parents with no other adults but also than cohabiting couples and single parents with another adult. The evidence for economic gains to marriage is quite strong, even for less-educated and low-income individuals.”
“Married and Unmarried Parenthood and Economic Well-Being: A Dynamic Analysis of a Recent Cohort” The last paper of this series adds a longitudinal perspective to the analysis of marriage and economic well-being, and uses several techniques to control for the selectivity into marriage. Findings are based on the National Longitudinal Survey of Youth, 1979 cohort. Compared to the earlier two papers, this study provides a lengthier analysis of the factors affecting family status, particularly the likelihood of spending time as a single parent, prior to exploring economic well-being. As with his other studies, Lerman then examines the relationship between union formation and economic well-being, and whether this relationship is different for disadvantaged families (defined primarily by mothers’ aptitude scores or the experience of a pregnancy outside of marriage). This paper focuses primarily on the welfare ratio (or income-to-needs ratio) rather than economic hardship.
The basic descriptive findings in the beginning of the paper show that the likelihood of ever being a single mother is highest among Black women, followed by Hispanic women and White women (77, 52 and 32 percent respectively). Conversely, the opposite is true for the likelihood of ever being married (65, 86 and 94 percent respectively). When comparing family status by aptitude level (or AFQT score), the results are not surprising, showing mothers with higher aptitudes more likely to have ever married and less likely to have ever been a single mother.
Further exploring the longitudinal path that mothers follow over time, Lerman shows the relationship between the initial family status after a child is born and subsequent family status. Those mothers who started as married spent 84 percent of their subsequent years married and only a small fraction of time as either a cohabiting or single parent. Those starting as cohabiting spent roughly a third of their subsequent years in each of the other states. Among mothers starting off single, the breakdown was roughly one quarter of subsequent years as married, one tenth as cohabiting and over 60 percent single. When looking by race we see similar patterns but with slight variations. For example, compared to mothers overall, Black mothers were somewhat more likely to move from married or cohabiting to single and less likely to move out of single status.
Lerman also presents a variety of multivariate results on the relationship of initial family status to subsequent family status, controlling for numerous related factors. Mothers who marry early (any time prior to one year following the child’s birth.) are notably less likely to spend time later as single parents compared to mothers who cohabit. Further analyses show marriages that occur after pregnancy but prior to birth (shotgun marriages) are only marginally less beneficial compared to conventional marriages (marriages occurring prior to pregnancy) in terms of reducing time spent as a single parent.
Lerman then examines the relationship between family formation and economic well-being where well-being is measured by the welfare ratio.(7) The average welfare ratio following first birth was nearly twice as high for married mothers compared to cohabiting mothers, more than twice as high compared to single mothers living with other adults, and 60 percent higher compared to single mothers living alone. These benefits extended to Black mothers and mothers with low AFQT scores, although the comparative advantage of married mothers was smaller. Among women who experienced their first pregnancy outside of marriage, those who married prior to the birth (shotgun marriage) were about 38 percent better off than women who did not marry.
These benefits attributable to marriage held true when using multivariate analysis to control for other family characteristics that might affect well-being. Many of these results indicated not only a higher standard of living for married families, but also more stable economic outcomes. A number of factors measured prior to the pregnancy were also significant, including poverty status, work experience, education and aptitude scores. Further analyses show that while the benefits of marriage were significant for White, Black and Hispanic families, the effects were smaller among Black and Hispanic families compared to White families.
Although these estimates control for a wide variety of observable family characteristics that might affect well-being, there may be other, unobserved characteristics that affect both the decision to marry and the family’s economic well-being. In an effort to compare families whose characteristics are as similar as possible, Lerman also analyzes the returns to marriage specifically among women experiencing a pregnancy outside of marriage. Those who married prior to the birth of the child (a shot-gun marriage) were significantly better off in terms of reduced chronic poverty than those who remained unmarried at the time of birth, even after controlling for a variety of other factors that might affect well-being. Moreover, the positive effect of marriage on reducing poverty was greater among Black mothers and mothers with low aptitude scores compared to mothers overall.
Lerman fine-tunes this comparison by categorizing mothers based on their marriage prospects, or likelihood of marrying.(8) He finds that for women experiencing a pregnancy outside of marriage, those who married sometime within six months following the birth were notably better off compared to those who remained unmarried, even among those with the lowest marriage prospects. Further analyses reveal, however, that a marriage occurring after a pregnancy is not as beneficial as a marriage occurring prior to pregnancy.
As a final test to see whether the economic returns attributable to marriage are truly an impact of marital status and not due to other factors that may affect selection into marriage, Lerman estimates a series of random effects models and fixed effects models. Both are designed to net out the effects of unobserved family characteristics when estimating the impact of marriage on economic well-being. Both sets of results were similar and revealed significant impacts of marriage on well-being (measured by welfare ratios). While cohabiting parents were better off than single parents, the benefit they experienced was roughly half that of married parents. Results were positive and strongly significant for mothers overall, Blacks, Whites, Hispanics, mothers with low and mid aptitude scores, and mothers with a premarital pregnancy.
Lerman concludes that “Even among the mothers with the least qualifications and highest risks of poverty, marriage effects are consistently large and statistically significant.... The robust nature of the estimates lends some credence to the view that marriage itself generates economic benefits for mothers and children.”
Endnotes
1. Kelleen Kaye is a senior analyst at the U.S. Department of Health and Human Services. The findings presented here represent her synthesis of a series of papers written by Dr. Robert Lerman, with his review and approval. Any views expressed in the research reviewed here are solely those of Dr. Lerman’s and are not attributable to the U.S. Department of Health and Human Services.
2. Robert Lerman is the Director of the Labor and Social Policy Center at the Urban Institute and Professor of Economics at American University. His work was funded through a grant from the U.S. Department of Health and Human Services, Office of the Assistant Secretary of Planning and Evaluation.
3. Income-to-needs ratios and welfare ratios are used synonymously and are defined as the family’s income relative to the poverty level for that family’s size. A higher income-to-needs ratio or welfare ratio implies a greater degree of well-being.
4. The nine union formation groups are: 1) married couples, two biological or adoptive parents; 2) married couples, 1 biological or adoptive parent; 3) other married couples, children in foster or kinship care; 4) cohabiting couples, two biological or adoptive parents; 5) cohabiting couples, 1 biological or adoptive parent; 6) other cohabiting couples, children in foster or kinship care; 7) single biological, adoptive or step parent, other adults; 8) single biological, adoptive or step parent, no other adult; 9) other single parent, children in foster or kinship care.
5. While poverty and material hardship are related, the overlap is not complete and it varies by the type of hardship being examined. For example, the percent of families that either could not pay rent or missed meals was higher than the percent of families in poverty.
6. These findings are based on multivariate analyses that include a control variable for the income-to-needs ratio.
7. Recall that welfare ratio is used synonymously with income-to-needs ratio, and is defined as the family’s income relative to the poverty level for that family’s size. A higher welfare ratio implies a greater degree of well-being.
8. This is done using propensity matching scores, which combine into a single scale a variety of characteristics that place a mother at greater or lesser risk of remaining unmarried.
Marriage and the Economic Well-Being of Families with Children: A Review of the Literature
By:
Robert I. Lerman
| This report was prepared for the U. S. Department of Health and Human Services' Office of the Assistant Secretary for Planning and Evaluation under HHS Grant Number 00ASPE359A. The views expressed are those of the authors and should not be attributed to the U.S. Department of Health and Human Services or to the Urban Institute, its trustees, or its funders. The authors thank our project officer, Kelleen Kaye, and Avner Ahituv for useful comments and Carolina Krawiec for excellent research assistance and advice. |
Introduction
The last four decades of the twentieth century witnessed a series of changes that have been described as an "earthquake that shuddered through the American family" (Preston 1984). These changes—which include very large increases in non-marital childbearing and cohabitation, higher ages at first marriage, and higher rates of divorce and separation—have had a direct and profound impact on the well-being of American children. In 1998, only 68 percent of all children in the United States lived with both parents (Lang and Zagorsky 2000), and more than half of all children can now expect to spend at least some part of their childhood in a single-parent family. In 2000, two in five children in families headed by single women (39.7 percent) were poor compared to only 8.1 percent of children in married families (U.S. Census Bureau 2000).
These changes in family structure have caused a great deal, perhaps all, of the increases in child poverty between the early 1970s and the 1990s (Lerman 1996; Sawhill 1999). In addition, the shift toward single-parent families may have contributed to a higher incidence of other social problems, such as higher rates of school dropouts, of alcohol and drug use, of adolescent pregnancy and childbearing, and of juvenile delinquency (Lang and Zagorsky 2000; McLanahan and Sandefur 1994). Family structure has become so important to the well-being of American children that some observers now argue that marriage is replacing race, class, or neighborhood as the greatest source of division in the U.S. (Rector, Johnson, and Fagan 2001; Rauch 2001).
Recognizing the critical role of family structure, especially in low-income communities, the Congress placed the issue of marriage on the nation's legislative agenda when it passed new welfare laws in 1996 under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA, P. L. 104-193). PRWORA emphasized marriage as the foundation of a successful society and as critical to the interests of children. PRWORA aimed not only to expand work and reduce welfare dependency, but also specified explicit goals to "end the dependence of needy parents on government benefits by promoting...marriage," "prevent and reduce the incidence of out-of-wedlock pregnancies," and "encourage the formation and maintenance of two-parent families."
In the six years since the passage of PRWORA, the idea of a public policy role in promoting marriage has gained strength. In the context of reauthorizing the primary welfare program (Temporary Assistance to Needy Families, or TANF), the Bush Administration proposed funding for efforts to support healthy marriages through education, training, mentoring, public advertising, and reducing financial disincentives to marry. Yet, initiatives aimed at promoting healthy marriages are controversial. Some object to the initiative on philosophical grounds, arguing that the government should not involve itself in such deeply personal matters. Others question the effectiveness of spending money on marriage promotion as a way of reducing poverty. A common argument is that providing single mothers with financial supports can do more than marriage promotion to reduce child poverty. Some worry that marriage promotion might end up penalizing single-parent families or ignoring the potential dangers of additional domestic violence. Still another concern is that marriage promotion efforts will do little for minority families, partly because of the weak earnings capacities of minority men (Mincy 2001). Instead of promoting marriage, many advocate policies to help non-custodial parents contribute additional child support and become more involved in the lives of their children. Such efforts could include employment and training services for non-custodial fathers and other low-income men, reforming the public child support enforcement system to reduce work disincentives, and offering transitional employment and case management services to ex-offenders (Holzer and Offner 2002; Sorensen, Mincy, and Halpern 2000).
Without a significant change in the earnings capacities of low-income men, opponents of marriage initiatives argue that families who are at a high risk of poverty will gain few economic benefits from marriage. Indeed, marriage may actually worsen rather than ease economic hardship (Lichter, Graefe, and Brown 2001; Edin 2000).
Advocates of marriage promotion policies cite a large body of evidence pointing to the economic and social gains associated with marriage (Waite and Gallagher 2000). The social science literature has documented impressive positive associations between marriage and the earnings of men, family income, wealth, mental health, longevity, happiness, and the success of children (Institute for American Values 2002). Studies find gains from marriage, even among people with similar personal, family, and geographic characteristics. Yet, questions remain about key issues relevant to pro-marriage initiatives: Do the gains extend to the low-income population? In what ways do the gains result from marriage itself, as distinct from unmeasured differences in personal attitudes, talents, and circumstances? Is the link between marriage and positive outcomes a causal relationship and, if so, how do the causal mechanisms work?
The purpose of this paper is to bring together the empirical evidence on one aspect of the potential gains from marriage—the impact of marriage on the current economic well-being of families with children. While empirical evidence alone cannot settle public policy debates, especially on such value-laden issues as marriage promotion, evidence can inform the discussions and potentially clarify the differences between positions held by competing sides. The first step is to consider theoretically the ways in which marriage might enhance economic well-being. The second step is to clarify the empirical questions about the potential roles of marriage. Next, we turn to the empirical evidence. After presenting the observed differences in income by marital status, we examine studies of the impact of higher marriage propensities on incomes, of gains in marriage relative to cohabitation, of the stimulus to male earnings associated with marriage, and of the changes in economic well-being associated with entry into marriage, divorce, remarriage, and parenthood. We assess the findings on all groups, but focus especially on the effects of marriage on low-income, minority, and/or less educated individuals.
[The entire paper is available in Portable Document Format (PDF).]
Impacts of Marital Status and Parental Presence on the Material Hardship of Families with Children
By:
Robert I. Lerman
| This paper was prepared for the U. S. Department of Health and Human Services' Office of the Assistant Secretary for Planning and Evaluation under HHS Grant Number 00ASPE359A. The views expressed are those of the authors and should not be attributed to the U.S. Department of Health and Human Services or to the Urban Institute, its trustees, or its funders. The author thanks Stephanie Riegg for excellent research assistance, Elaine Sorensen, Kelleen Kaye and Linda Mellgren for advice and comments, and the U.S. Department of Health and Human Services for helping to fund this research. An earlier version of this paper was presented at the 23rd Annual Research Conference of the Association for Public Policy and Management, Washington, DC, November 1-3, 2001. |
1. Introduction
The decline in marriage is a well-known and well-documented phenomenon, with major consequences for poverty, inequality, and the use of welfare programs. The proportion of children in families headed by never-married mothers—families with the highest poverty rates and lowest incomes—jumped from less than 1 percent in the early 1970s to over 9 percent today. Researchers (e.g., Lerman, 1996; Sawhill, 1999) attribute a substantial share of the rise in poverty among children to the changing structure of families with children. Even after the decline in poverty rates during the 1990s, the poverty rate experienced by single mother families was over 35 percent, while about 6 percent of married couple families with children had incomes below the poverty line. The differential in chronic poverty is also high, with one-parent families facing a two year poverty rate 10 times higher than the rate among two-parent families (22.8 percent vs. 2.8 percent).(1) An accumulation of evidence also suggests that children growing up without two natural parents do worse on a variety of social and economic outcomes.(2)
Given these realities, it is not surprising the Congress declared promoting marriage and strengthening two-parent families as goals of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). States have so far done little to implement this goal, but the Bush Administration and members of Congress have recently sponsored legislation to fund projects to promote healthy marriages through marriage preparation services, education programs, and public awareness campaigns. These proposals for public interventions aimed at directly promoting marriage are controversial partly because of the skepticism about the ability of marriage to lessen economic hardship and improve living standards, especially among people with low education and earnings capacity.
The issue is critical for policymakers and for the public. The Congress and the President must decide on how to structure a wide array of taxes, transfers, and other public policies that provide incentives or disincentives to marriage. In doing so, they sometimes have to weigh the benefits of policies to encourage marriages against the benefits of helping families with unmarried parents. Judging the impacts of policies that discourage or shorten marriages requires information on how policies affect marriage, how marriage affects current economic hardships, and how marriage affects future outcomes of children.
Most existing studies deal with the impacts of policy on marriage and the impacts of marriage on children. Only a few studies concentrate on how marriage affects the economic status of the less educated or low-income populations, especially in comparison to a variety of other family forms, including cohabitation.(3) This study emphasizes the effects of marriage and other household arrangements on current economic well-being, with a focus on the less-educated and low-income groups. Using data from the National Survey of America's Families (NSAF), I measure the detailed family, parental, and household patterns as well as 1997-1999 changes in these patterns. Next, I examine the relationships between marriage and income-to-needs ratios as well as between marriage and material hardship. The measures of material hardship include such outcomes as cutting or missing meals because of an inability to buy food and not having enough money to pay rent, mortgage payments, or utilities.
The paper answers the following questions:
- How do families with children differ with respect to the presence of married couples, biological, adoptive and stepparents, and other adults in one-parent families? Did the trend toward fewer intact two-parent families reverse itself between 1997 and 1999?
- How do levels of economic hardship among children vary by marital status and household living arrangements? In particular, what are the differences between married and unmarried two-parent families and between married couple families and families in which single parents are living with other adults?
- Do children in married couple families experience the same level of hardship as other children in families with the same level of income relative to needs?
- To what extent is marriage associated with lower levels of hardship among children of less-educated mothers?
- Did the marriage-hardship relationship change between 1997 and 1999?
The analysis uses both cross tabulations and simple multivariate regressions to examine these questions. This initial analysis does not involve causal modeling and thus does not yield conclusions about a causal role of marriage. Still, some of the results show important evidence of reduced material hardship associated with marriage.
Section 2 describes our initial expectations, the data, and the methods. The next section presents the complex patterns and 1997-99 trends of the household living arrangements of children and the marital status of their parents. Section 4 reports the findings from tabulations and regressions on both the relationship between poverty and household structure and between material hardship and household structure. The last section draws conclusions and discussed implications.
[The entire paper is available in Portable Document Format (PDF).]
Endnotes:
1. These data are available on the U.S. Bureau of the Census web site in the section on poverty.
2. See McLanahan and Sandefur (1994). For a caution about exaggerating the effects of single parenthood on children, see Cherlin (1999).
3. For an important recent exception, see Lichter, Graefe, and Brown (2001). They find marriage lowers poverty rates of women significantly, net of family background, education, race, age, and having a non-marital births as a teenager or later.
How Do Marriage, Cohabitation, and Single Parenthood Affect the Material Hardships of Families with Children?
By:
Robert I. Lerman
| This report was prepared for the U. S. Department of Health and Human Services' Office of the Assistant Secretary for Planning and Evaluation under HHS Grant Number 00ASPE359A. The views expressed are those of the authors and should not be attributed to the U.S. Department of Health and Human Services or to the Urban Institute, its trustees, or its funders. The author thanks Kelleen Kaye for useful comments and Stephanie Riegg and Carolina Krawiec for excellent research assistance and advice. |
1. Introduction
The decline in marriage and associated two-parent families in the United States continues to complicate efforts to reduce child poverty. Although the 30-year trend away from two-parent families has slowed in recent years, the share of children living outside married couple families remains high. About one in three children live in one-parent families and nearly 40 percent live away from at least one biological parent. The negative impact on poverty and inequality is well documented. Recent estimates suggest that were marriage rates at levels of the early 1970s, the 1998 US child poverty rate would have been 3.5 percentage points lower (Thomas and Sawhill 2001), as would income inequality among children (Lerman 1996). Waite and Gallagher (2000) report a number of other positive economic and social effects of marriage.
Yet, questions have been raised about whether the economic benefits of marriage extend to low-income, less educated women. Kim Gandy, president of the National Organization for Women, reportedly argued, "To say that the path to economic stability for poor women is marriage is an outrage." (Toner 2002). The worry is that the prospective spouses of low-income women and men are themselves too poor or too limited in their earnings capacities to contribute significantly to the family's resources (see Edin 2000). While the lack of a second earner complicates the economic problems of less educated mothers, another adult with zero or low earnings would hardly be a solution. On the other hand, a second earner or caregiver need only provide about $2,000-$3,700 in earnings in order to offset the increase in family needs required by an additional person.(1)
The focus of much of the discussion about the economic benefits of marriage is on the distinction between married couple families and single parent families. Yet, as some authors emphasized decades ago (e.g., Stack and Simmel, 1974), low-income single parents are often able to draw on other family members for support, either formally or informally. The presence of other adults could, in principle, limit the advantages of marriage associated with economies of scale in household production, with the division of labor and risk sharing among adults (Lerman 2002). If so, the economic benefits from marriage could be modest or zero relative to such family forms as cohabitation or single parenthood with other adults present in the household.
A second issue arising in estimating the gains from marriage among adults with low earnings capacities is that income, even income relative to needs, may be a weak measure of economic well being. Current income relative to needs does not take account of permanent income, income variability, wealth accumulation, or the ability to draw on resources of relatives and friends. Broader measures of economic well being may be of special importance to low-income families trying to avoid material hardships. As Mayer and Jencks (1989) demonstrated, income poverty offers only part of the explanation for the experience of material hardships. Some families may manage their budgets better than others. Measured income may understate actual income and the ability to consume, particularly for low-income families. While some poor families are experiencing material hardships, other equally poor families are able to avoid these problems by drawing on assets or on help from friends.
Marriage might well offer families a better chance for asset building and transfers from friends and family. Hao (1996) points to the less extensive networks available to mothers with cohabiting partners and to single parents who receive little from the kin of non-custodial fathers. Hao finds that while single parents and cohabiting couples are less likely to receive transfers from the kin of the absent biological parent, they are more likely to obtain transfers from friends. Apparently, the higher transfers to married couples encourage wealth accumulation and add to the wealth advantage married couples have over cohabiting couples and single parents.
In a recent paper (Lerman 2001), I examined the economic role of marriage, while taking account of the complexity of household forms and using direct measures of hardship as well as income and poverty measures. The analysis used information on family and household relationships and on material hardship from the National Survey of America's Families (NSAF). Results based on tabulations and multivariate analyses showed that even among the poor, material hardships were substantially lower among married couple families with children than among other families with children, including those with at least two potential earners. Moreover, the size of the marriage impacts was quite large, generally higher than the effects of education. The impacts were particularly high among non-Hispanic black families. Reductions in material hardship associated with marriage emerged not only relative to one-parent families with no adult present, but also relative to cohabiting parents and to one-parent families with other adults present.
This paper extends the analysis in two ways. First, the paper replicates and widens the review of hardship and household status, using data from the Survey of Income and Program Participation (SIPP). Topical module 8 in the 1996 SIPP panel includes a more extensive set of questions about material hardships than were included in the NSAF. In addition, SIPP questions deal with the availability of help from friends and relatives. Second, the paper examines the question of whether the reduced hardship experienced by married families, including poor married couple families, is simply the result of higher levels of income and lower levels of income variability in the past two years. The SIPP analysis also takes account of the role of household stability in determining material hardships.
The next sections describe the data and methodology. Section four presents descriptive information about the sample and basic tabulations linking specific material hardships to household status. The fifth section presents the multivariate results, capturing the effects of the household status, conditional on the current income-to-needs ratio, the prior level and variability of income-to-needs ratios, and the extent of household instability. I summarize the findings in section six.
1. The increase in the poverty threshold associated with adding another adult depends on the initial family size and number of children. See http://www.census.gov/hhes/poverty/threshld/thresh01.html.
[The entire paper is available in Portable Document Format (PDF).]
Married and Unmarried Parenthood and Economic Well-Being: A Dynamic Analysis of a Recent Cohort
By:
Robert I. Lerman
| This report was prepared for the U. S. Department of Health and Human Services' Office of the Assistant Secretary for Planning and Evaluation under HHS Grant Number 00ASPE359A. The views expressed are those of the authors and should not be attributed to the U.S. Department of Health and Human Services or to the Urban Institute, its trustees, or its funders. The author thanks our project officer, Kelleen Kaye, and Elaine Sorensen for providing useful comments, Carolina Krawiec and Stephanie Riegg for excellent research assistance, and Avner Ahituv for help in implementing econometric specifications. |
1. Introduction
Over the last four decades, the declining proportion of married adults in the United States has contributed to a significant worsening of the economic status of families with children. The rise in single parenthood, together with limited child support payments, has meant that more children must rely primarily on the income of only one of their parents, usually the mother. As a result, despite healthy growth in per capita income, child poverty rates in the U.S. have remained at their 1970s levels. Researchers have demonstrated that reduced marriage propensities have caused substantially higher child poverty rates, even after accounting for the fact that the men unmarried mothers might marry have lower incomes than current married fathers (Lerman, 1996; Sawhill and Thomas, 2001).
On one level, it should be no surprise that single-parent families, with fewer potential earners or caregivers, would have much lower incomes than married couple families. But, in fact, understanding the decline in marriage and its implications for economic well-being is a complex problem. Given the dramatic increases in cohabitation and the high levels of co-residence of single mothers with their parents or other adults, many single mothers live with a second potential earner/caregiver and thus do not have a built-in economic disadvantage relative to married couple families. The simple distinctions between married parents and single parents are no longer sufficient for analyzing economic differences. The specific household form as well as the timing of marriage, divorce, separation, and non-marital childbearing will all be relevant to the way marriage and other family structures affect economic hardship. The analysis must take account of trends and patterns of marriage rates at each age, of childbearing rates within and outside marriage, of the duration of marriages, of cohabitation rates, of separation and divorce rates, and of household living arrangements of single parents.
The low and unstable incomes of potential husbands are another reason why marriage might not improve economic welfare of many mothers and children. According to ethnographer Kathryn Edin (2000), when asked about marriage, low-income mothers say that, "...marriage usually entails more risks than potential rewards." Although some of the risks relate to non-economic issues, such as domestic violence, trust, and sharing control of the household, women often mentioned the risk that potential husbands lacked the ability to earn a steady, adequate income and that they consequently become an economic burden.
In a recent paper (Lerman, 2001), I examined the role of marriage in limiting the degree of material hardship faced by families with children. The paper's focus was on whether marriage limited the incidence of material hardship, even among poor or near-poor families. The results showed that married, biological parents experienced lower rates of hardship than other parents with similar characteristics, including those with similar family income-to-needs ratios.(1)
This paper analyzes the relationship between marriage and economic well-being in a dynamic context. Using data on women and mothers over time enhances our ability to distinguish a causal effect of marriage from a selection effect. Cross section estimates are subject to bias because individuals who marry may have unobserved advantages affecting their incomes over individuals who do not marry. With panel data, we can observe the income profiles over time of individuals who marry and those who do not.
Still, limiting the selection problem is inherently difficult in the absence of an exogenous variable that reduces or stimulates marriages in one environment but not in another. I turn to four strategies. The most straightforward compares the economic outcomes of mothers by marital and family status categories, while taking account of differences in race, academic and technical ability, and other observed characteristics. The second is to compare women in "shotgun" marriages (marriages induced by childbearing, i.e., women with premarital pregnancies in marriages that take place after the pregnancy but before the birth of a child) to women who have premarital pregnancies and who do not marry before or soon after the child's birth. A third comparison is between women in shotgun marriages and women in conventional marriages (women who marry before becoming pregnant).
The third approach uses propensity score matching. Specifically, I estimate the probabilities of marriage among women who have a non-marital pregnancy and then comparing married and unmarried mothers who have similar probabilities of marriage. Fourth, I estimate the impact of marriage on outcomes, while controlling for unobserved differences among individuals using fixed and random effect models.
The diverse approaches deal with different questions about potential economic gains from marriage. The tabulations, basic regressions, and propensity score matching approaches ask mostly about what happens to the long-run economic gains from marrying before or soon after the birth of their first child. This approach focuses on the impact of an initial marriage on subsequent outcomes, incorporating direct and indirect effects of early marriages. This approach does not capture benefits from marriages that occur some years after initial childbearing and thus may understate income gaps associated with marriage. The reason is that income gaps might narrow between the initially married and initially unmarried as marital status changes for both groups; some of the initially married women become unmarried for some years and vice versa. To deal with the potential ongoing benefits of marriage, while at the same time controlling for unobserved differences among mothers, we employ fixed and random effects models to examine the question of how changes in marriage in specific years affect changes in economic status. These models control for the possibility that unobserved individual differences might be responsible for any observed connections between marriage and economic well-being.
The major goal of the paper is to bring new evidence to bear on the question of how marriage affects economic status. No single answer is plausible because any impacts from marriage itself are likely to vary with the circumstances such as which men and women marry and when they marry (say, before or after pregnancy or childbearing). Of particular interest are marriages to women with relatively low earnings capacities and to women who have a premarital pregnancy. A second goal is to describe in detail the marriage and family status experiences of women after their first pregnancy.
The following section takes up the task of clarifying the mechanisms by which marriage could enhance the economic status of mothers and children. I then discuss the data and present initial tabulations of patterns of marriage and family status over time. Next, I present descriptive evidence about the connection between marriage and economic well-being. The fifth section describes the propensity score methodology and the results drawn from applying this approach. The sixth section discusses and uses fixed and random effects models. I conclude with some summary remarks and interpretations.
1. Arguably, holding income-to-need levels constant may bias any observed impact of marriage downward. If marriage induced income gains, then married mothers with the same incomes may well have weaker earnings capacities than unmarried mothers. Still, the findings of reduced hardship among married women were robust and revealed consistent gains not only compared to single parents living with no other adults, but also compared to unmarried mothers living with a cohabiting partner or with other adults.
[The entire paper is available in Portable Document Format (PDF).]