The awkward reality about marriage and inequality
For richer, for poorer: an important vow, but not as risky as it might sound. Richer is much more likely.
Researchers at the American Enterprise Institute estimate that in the US, the median income for families would be 44 percent higher if the proportion of married families was the same today as it was in 1980. This socio-economic gap is widening between families with married parents and those without, in what the researchers call “family inequality.” While other factors are definitely at play, the “retreat from marriage” is behind as much as 41 percent of the growth in family-income inequality, most of which happened between the 1970s and 1990s when sole-parenthood became much more common. It’s critical here that we don’t forget that behind these statistics are real lives, parents who make huge sacrifices and deeply care about doing the best thing for their kids, regardless of what their family looks like. If the inequalities are real, however, we need to understand them better.
It turns out that men in stable marriages worked more hours and earned more than their single friends—even those in non-marriage relationships, while women in stable marriages worked less but earned about the same as their friends. This, the authors suggest that, “the institution of marriage continues to boost men’s commitment to work and the individual economic success they enjoy” and “that marriage is less a barrier to individual economic success for women than it used to be.”
This gap between the “I do”s and the “I didn’t”s is reinforced and perpetuated in a vicious intergenerational cycle, because, as the researchers claim: “marriage is increasingly becoming the province of well-educated, high-earning adults and because high earners are increasingly likely to marry partners with a similar socioeconomic profile. Adults with less education and fewer assets have become less likely to get and stay married.” Not only that, but children who grow up with both parents are also more likely to become highly educated, get married and earn more when they get older themselves.
What about New Zealand? Kids today are much less likely to grow up in married families and more likely to live with one parent or unmarried parents. Of families with children, 70 percent are now headed by two parents, down from just under 90 percent in 1976; a relatively high rate for the OECD. A rising proportion of births are outside of marriage too, from 10 percent in 1964 to nearly 50 percent today. This follows the increase in couples in de-facto unions, now representing more than one-third of relationships. Cohabiting couples may eventually marry, but research suggests this is increasingly unlikely. Both marriage and divorce rates are decreasing too.
Comparisons between New Zealand and America must be made with caution, but these underlying fundamentals suggest there is something to this. There is some evidence to suggest that a decline in stable two-parent households has significantly contributed to the much-debated rise in income inequality. According to research conducted by Motu in 2003, “changes in household structure and in the socio-demographic characteristics of households are the main factors contributing to the rise in inequality.” Shifting family arrangements are responsible “for between one-tenth and one-third” of the rising income inequality between 1983 and 1998.
While more research certainly needs to be done, we can’t continue to ignore the role that family structure plays in the economic and social well-being of New Zealand. It’s a discussion worth having.