How Marriage and Divorce Impact Economic Opportunity

Despite all the talk about poverty, inequality, and social mobility these days, there has been too little attention to the ways in which a lack of opportunity is being exacerbated by changes in family composition. Yet the growth of single parents is having a profound impact.

Single parents have much lower incomes and much higher poverty rates than their married counterparts. Some of this, to be sure, is because they also have other characteristics such as less education that limit what they can earn. But two incomes, even if they are low, are always better than one. Two full-time $10-an-hour jobs bring in roughly $40,000 a year, hardly a princely sum but enough to support a family well above the poverty line, even after child care or other expenses. For better or worse, the days when a typical family with children could get by with just one income are over.

Similarly, social mobility rates between generations are higher among children who live with their continuously married parents than among those who experience either a family divorce or a long period of single parenthood.  A child born to a never-married mother in the bottom fifth of family income is 3 times more likely to stay in the bottom fifth than a child born to a continuously married mother with equally low income. Once again, not all of this is the pure effect of family structure but even after adjusting for many of the other differences between married and unmarried parents, a significant impact remains.

Some evidence, cited by MIT professors David Autor and Melanie Wasserman suggests that boys have been more adversely affected by these trends than girls. This may be one reason why girls do better than boys in school and why gaps in school performance by gender are now wider than those between poor and nonpoor children, as reported recently by David Leonhardt of the New York Times. Quite apart from any gender differences, there is near-consensus that the retreat from marriage has not been good for children. Of course, some single parents are doing a terrific job under difficult circumstances, and didn’t choose those circumstances, but the research is clear that, on average, their kids will grow up with fewer resources and not do as well in school and in life.  

As an example, let’s take a closer look at how the growth of single parents has affected childhood poverty rates. In 2012, the child poverty rate was 21 percent. If the proportion of children living in single parent families had remained at the 1970 level (and we make some adjustments for the fact that single parents have other disadvantages that explain their greater poverty), then the child poverty rate in 2012 would have been 5 percentage points (or 24 percent) lower.

As a point of comparison, refundable tax credits such as the Earned Income Tax Credit, which are currently our biggest weapon in the war on poverty and cost over $60 billion a year, reduce child poverty by about the same amount. The EITC has grown dramatically since the mid-1970s but its good effects have been offset by a demographic tide of single parents who are often dependent on government to make ends meet.  My forthcoming book, Generation Unbound: Drifting into Sex and Parenthood without Marriage (Brookings, 2014) will have more to say about these issues.