Divorce, single parenthood, cohabitation – and your wallet
This article, the second part of a two-part series, is based on research work I did this past summer as a Washington Scholar with Family Research Council, a non-profit in Washington, DC, under the advising of Dr. Patrick Fagan. From this work, the article acts as a summary of a section of the synthesis paper I wrote on the correlation between relational acceptance/rejection and economic outcomes.
Divorce, single parenthood, and cohabitation have grown over the past 50 years. Despite general economic growth, those associated with these trends have experienced much economic hardship.
Divorce breaks up the family unit and pooling of the economic resources that are a part of the marriage. Mothers with children who divorced by 1994 since being married at the latest by 1987 had an average income approximately $20,000 less than couples with children who remained married (Hanson, et. al., 1998).
The most sobering evidence is the effect of children during the divorce process. The parent who takes the children following divorce is drastically affected by their presence. For families with children, following a divorce, the parent with the children experiences a 52 per cent drop in their family incomes (Page and Stevens, 2004). In fact, divorcing or separating mothers are 2.83 times more likely to fall into poverty than those who remain married (Mauldin and Mimura, 2007). These figures show how economically detrimental divorce can be to a family.
Welfare programs are implemented to try to ensure that those in poverty are given financial support to attempt to escape it. For those who divorce with marriages lasting between 2 and 8 years, between 17 and 25 per cent of these divorces led to the wives needing welfare aid. Of those mothers with minor children, 20 percent to 40 per cent receive welfare benefits (Hoffman and Duncan, 1995). Overall, one-fifth to two-fifths of all divorces result in the women of the marriage falling into poverty.
Children from divorced mothers are less likely to reach the top of their income distribution regardless of their parents’ income (DeLeire and Lopoo, 2010). Divorced families tend to stay closer to the lower end of the income distribution through the generations, experiencing little positive economic mobility (Couch and Lillard, 1997).
The chances of children entering the world into poverty are increased through divorce and their chances of leaving poverty as they get older are less likely than if their parents had remained married. This can be troublesome, considering this can create a generation of people who struggle, like their parents, to escape poverty. Even worse is when children are born into single parent households.
Out-of-wedlock births have become more prevalent in the past decades, despite the abundant availability of contraceptives and abortion clinics. This leads to an increase in single parenthood. Children born to single mothers come into families that are less equipped economically to provide adequate care for the child than a two-parent married household can do.
In 1991, for US households with children, female-headed households with children possessed the lowest median income of all family structures with children (DaVanzo and Rahman, 1993). Children appear to be affected in a similar fashion.
Children in single parent households live in households with less family income and which are more likely to be in poverty than children in married parent households (Thomas and Sawhill, 2005). There is also an associated decrease likelihood of graduating high school (Boggess, 1998).
This lack of an education affects future economic attainment. For example, mothers with a high school diploma earn 7.25 percent more than mothers without a high school diploma (Pandey and Kim, 2008).
Marriage could bring some children out of poverty-stricken households and, with active income being earned by the parents, promote productivity for the children and offer them better opportunities to grow and invest in their human capital (Lerman, 1996). Consequently, this will aid them in the long-term by instilling the necessary abilities and education to experience upward economic mobility.
A natural question arises as to why marriage, not simply cohabitation, would be necessary to help bring single-parent household out of poverty. Cohabiting households are usually better off than single parent households but are considerably worse off than married parent households (Thomas and Sawhill, 2005).
Mothers who cohabit are less well-off economically than mothers who are married to a man other than the father of their children (Thomson, et. al., 1994). Cohabiting couples do not experience similar levels of economic well-being compared to married couples. Thus, living with another person does not trigger a growth in economic well-being. Why is it that there is not the same economic outcomes in cohabitation as there are in marriage?
One of the more prominent characteristics of successful marriages is the ability to handle finances together, usually in the form of pooling their incomes to allocate their resources most effectively. This cooperation is found less frequently within cohabitating relationships. In fact, cohabiting couples in the United States are 3.6 times more likely to keep their money separate than married couples (Heimdal and Houseknecht, 2003).
Cohabitors who only stay together for less than 4 years are unlikely to pool their incomes. For those who stay together longer than 4 years, it cannot be said that they do not pool their incomes. However, most cohabiting relationships do not last more than 4 years, with about 77 percent separating by the fourth year of cohabitation (Winkler, 1997).
Despite the fact that cohabiting and married couples have similar appearances as a household, it is estimated that cohabiting households with children spend 26 percent less on health care, and 22 percent less on education, compared to married couples with children (DeLeire and Kalil, 2002).
Marriage is the most consistent family type shown to promote both short- and long-term economic growth and human capital investment. The argument being made here is not against other family structures from forming. Rather, we must work to create the optimal environment where we can be successful and offer our children the opportunities to foster and grow – not only in the necessary talents to live economically fruitful lives in this world, but also in being good Christians, being witnesses for all to look to on how to live “the good life.”
This article is meant to shed light upon the negative outcomes that are associated with divorce, single parenthood, and cohabitation. There is much research on these questions, and I merely highlight a relatively small sample. I want to thank The Rover for allowing me to share my research and encourage those who want to learn more about this topic to email me.
Andrew Kidd is a senior RA in Dillon Hall. Contact him at akidd@nd.edu.
