Impacts of Marital Status and Parental Presence on the Material Hardship of Families with Children

Impacts of Marital Status and Parental Presence on the Material Hardship of Families with Children July 2002 ________________________________________________________________________ Robert I. Lerman Urban Institute and American University 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. Abstract The decline in marriage and its serious consequences for poverty and inequality are well documented. This paper concentrates on how marriage, cohabitation, single parenthood and the presence of biological parents affect the incomes and material hardships of children. The study uses data from the National Survey of America’s Families to examine: 1) recent changes in the marital and household structure of families with children, 2) how levels of income and material hardship vary by family structure, and 3) whether marriage acts to reduce material hardship, even among families with low incomes and among children of less-educated mothers. 1 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 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). 2 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 o