Household Income and Savings

Compared to single individuals, married households enjoy greater economies of scale, often access to more income, and higher savings rates. One might note that marriage creates a mechanical bias in household income since there are two potential earners in the family compared with only one potential earnings’ stream in households with a single adult. That is exactly the point. Marriage can create two sources of income and allows the household to take advantage of economies of scale (Lerman and Wilcox Reference Lerman and Wilcox2014). Even in married households where only one spouse is in the labor force, the presence of both individuals allow them to specialize to maximize the welfare of the household and provide a natural source of insurance if the primary earner loses his or her job (since the spouse that was previously not working can enter the labor force to provide additional income) (Becker Reference Becker1993). All these things are conducive to growth because they foster positive economic outcomes at the household level (which can aggregate up to the national level) (Samuelson and Modigliani Reference Samuelson and Modigliani1966). They may also promote economic growth by encouraging a stronger work ethic and by reducing the need for government-funded social welfare programs (Plümper and Martin Reference Plümper and Martin2003).

Even compared to comparable cohabiting couples, married couples have an economic advantage. Because they enjoy more commitment and, in many cases, more legal recognition and benefits, married couples enjoy more stability. New research from the Social Trends Institute, for instance, indicates both that cohabiting families are less stable than married families in much of Europe and North America, even when they have children together, and that the growth of cohabitation across much of the globe is linked to increased family instability in countries around the world (DeRose et al. Reference DeRose, Lyons-Amos, Wilcox and Huarcaya2017). If research in the United States is representative of trends across the globe, marriage’s comparative advantage in commitment and stability should translate into higher levels of savings; married couples are also less likely to incur expenses from a union dissolution, insofar as union instability is markedly higher in cohabiting families than in married families (DeRose et al. Reference DeRose, Lyons-Amos, Wilcox and Huarcaya2017). Indeed, stably married Americans typically accumulate more assets than men and women who are single, divorced, remarried, or cohabiting, even controlling for a range of background factors (Lupton and Smith Reference Lupton, Smith and Grossbad2003; Wilmoth and Koso Reference Wilmoth and Koso2002). The income, savings, and stability advantages associated with marriage should help to explain any advantages that countries with more married adults and families enjoy, compared to countries with more single or cohabiting adults.

Finally, the links between marriage and economic growth should also be paralleled when we turn our attention to the proportion of two-parent families in a society. Specifically, a greater proportion of two-parent families – especially when such families are stable – should promote economies of scale, income pooling, and higher levels of savings in societies across the globe. That is, we expect that adults in two-parent families are more likely to pool income and devote more money to savings than adults living by themselves or heading up single-parent families.

So, what does the cross-national evidence suggest about the links between marriage, two-parent families, and household economic patterns? We do not have access to data about household income in countries across the globe, but data taken from the World Bank, the Organisation for Economic Co-operation and Development (OECD), and the Demographic and Health Surveys (DHS) indicate an association between family structure and one important economic outcome, the savings rate, conducive to growth. (For a list of the countries and years included in our data analyses for Figures 8.1, 8.3, 8.4, 8.5, as well as for Tables 8.1 and Table 8.2, please see our online Appendix, Table 8A.1: http://sociology.virginia.edu/media/2696.) Specifically, Figure 8.1 indicates that the proportion of children living in two-parent families is associated with higher savings rates in nations across the globe. That is, in more than ninety countries, countries that have more children living in two-parent families also have higher rates of savings. This pattern is consistent with our hypothesis that two-parent families foster economic behaviors conducive to economic growth. Marriage is associated with two-parent families, but future research will have to determine if marriage itself has a similar relationship with household saving. However, in general, we suspect that strong and stable families foster patterns of household income and savings, both of which promote economic growth at the national level.

Figure 8.1 Gross savings as percentage of GDP, by proportion of children being raised by two parents: 2001–2015

Note: The y-axis in this figure provides the gross saving rates as a percent of GDP(World Bank national accounts data for 2001–2015). The x-axis splits the sample of countries into terciles based on the fraction of children being raised by two parentsbased on data from the World Bank, OECD, and the DHS. The sample includes 429 country-year observations from 90 countries representing the following regions: Africa (30), the Americas (11), Asia (16), Europe (30), and Oceania (3).

Male and Female Labor Force Participation

The research on men and work in the United States indicates that marriage tends to have a transformative impact on men. After marrying, men tend to work harder, smarter, and more successfully; they also are more likely to steer clear of risky activities (Nock Reference Nock1998; Lerman and Wilcox Reference Lerman and Wilcox2014). In the words of Nobel laureate George Akerlof (Reference Akerlof1998, p. 290), “men settle down when they get married,” adding, “Married men are much more attached to the labor force; they have less substance abuse; they commit less crime, are less likely to become the victims of crime, have better health, and are less accident prone.”

The United States experience is instructive here. Over the last forty years, the drop in male labor force participation has been largest among men who are not married (see also Chapter 5). In Figure 8.2, we plot the fraction of men by family status from 1979 to 2013. This figure indicates that married fathers had the smallest declines in labor force participation, whereas unmarried men who do not live with children have seen the biggest declines in labor force participation. That is, the fraction of married men with children who are in the labor force has stayed relatively stable during this time period (at about 90 percent), whereas the fraction of unmarried men without children in the home in the labor force has fallen to about 75 percent. Lerman and Wilcox (Reference Lerman and Wilcox2014) estimate that about one third of the decline in men’s labor force participation since 1979 in the United States is associated with the retreat from marriage in the United States.

Figure 8.2 Percentage of 25–50-year-old men employed, by marital status and fatherhood: 1979–2013

Note: This figure is from Lerman and Wilcox (2014).

To be sure, there is a debate about whether marriage causes higher labor force participation or vice versa. Several recent studies have noted that a contributing factor to lower marriage rates are the lower employment prospects for less-educated men (Carbone and Cahn Reference Carbone and Cahn2014; Wilson Reference Wilson1987); however, research by economists Ahituv and Lerman (Reference Ahituv and Lerman2007) indicates that stable marriage increases men’s attachment to the labor force and their income in the United States, even after taking into account background factors like education and job experience. Chapter 5 also shows that less-educated men who are married are much more likely to be working than are less-educated men who are not working.

Men’s stronger connection to the labor force is also linked to a marriage premium in personal income. Because men work more hours and work more strategically when they are married, they tend to enjoy higher incomes than their equivalently credentialed single peers (Lerman and Wilcox Reference Lerman and Wilcox2014). Research in the United States suggests this marriage premium is greater than 10 percent (Lerman Reference Lerman, Cohen and Wright2011). The evidence, then, suggests that marriage is associated with both more work and more income for men in the United States. Cross-national research in fifteen countries in Europe and North America also indicates that married men enjoy an income premium in most of these countries (Geist Reference Geist2006). However, much of the premium can be attributed to underlying human capital differences between married and unmarried men or to increased engagement or better opportunities at work associated with the transition to adulthood for men – rather than marriage per se (Geist Reference Geist2006; Killewald and Lundberg Reference Killewald and Lundberg2017). In other words, from this research, it is not clear if marriage exercises a causal role on men’s wages or, if instead, men with more human capital or better work opportunities are more likely to get and stay married.

Finally, the link between family structure and men’s work seems to be particularly strong for men who are married fathers. Evidence from the United States indicates that men tend to work the most hours and garner the highest income premiums when they are married fathers than when they are in other family statuses (Nock Reference Nock1998; Killewald Reference Killewald2012). Men may feel particularly strong internal and external pressures to provide when they are married with children to support financially. In other words, married fatherhood is associated with the greatest premium in work hours and income for men, at least in the United States.

If our expectations about marriage and fatherhood are correct, we would expect to find higher levels of labor force participation and income for men in countries with more married men or two-parent families. Here, we look at measures of men’s labor force participation by the proportion of children who are in two-parent families. Specifically, we use data from the World Bank and the Demographic and Health Survey to examine the relationship between the proportion of children within two-parent families and male participation in the labor force, hypothesizing that men who are helping raise their children have additional motivation to support their families and seek employment. Contrary to our expectations, Figure 8.3 indicates that men’s labor force participation for ages 15 and older is negatively associated with children living in two-parent families. Thus, at least in this international sample of more than ninety countries, we do not see evidence that more two-parent families foster higher paternal labor force participation. This runs counter to our predictions.

Figure 8.3 Male labor force participation, by proportion of children in two-parent families: 2001–2015

Note: The y-axis in this figure provides the average male labor force participation is based on the International Labor Organization database for 2001-2015 available from the World Bank. The x-axis splits the sample of countries into terciles based on the fraction of children being raised by two parents based on data from the World Bank, OCED, and the DHS. The sample includes 443 country-year observations from 97 countries representing the following regions: Africa (35), the Americas (11), Asia (18), Europe (30), and Oceania (3).

There is another way in which strong families, however, might weaken the economy. Strong families may reduce female labor force participation and income, which could serve as a drag on the economy. The evidence in the United States and Europe is ambiguous about the effect that marriage has upon women’s labor force participation and income (Geist Reference Geist2006; Killewald Reference Killewald2012; Lerman and Wilcox Reference Lerman and Wilcox2014). Motherhood, however, is associated with fewer hours, less work, and lower income for women in many countries in the developed world (Budig and England Reference Budig and England2001; Budig, Misra, and Boeckmann Reference Budig, Misra and Boeckmann2012; Gash Reference Gash2009; Harkness and Waldfogel Reference Harkness, Waldfogel and Polacheck2003). The maternal penalty is reduced in countries where norms and public policies support mother’s work (Budig, Misra, and Boeckmann Reference Budig, Misra and Boeckmann2012; Gash Reference Gash2009), but the broader set of findings in this research lead us to expect that motherhood is generally associated with lower labor force participation, fewer hours, and less personal income for women.

Indeed, our analysis of data taken from the World Bank, the OECD, and DHS indicates that a motherhood penalty exists at the national level when it comes to women’s labor force participation. Figure 8.4 indicates that women are less likely to be working when more children live in two-parent families. Accordingly, if strong and stable families discourage women from working, this may offset some of the positive effects that strong and stable families have on the economy.

Figure 8.4 Female labor force participation, by proportion of children in two-parent families: 2001–2015

Note: The y-axis in this figure provides the average female labor force participation based on the International Labor Organization database for 2001–2015 available from the World Bank. The x-axis splits the sample of countries into terciles based on the fraction of children being raised by two parents based on data from the World Bank, OCED, and the DHS. The sample includes 443 country-year observations from 97 countries representing the following regions: Africa (35), the Americas (11), Asia (18), Europe (30), and Oceania (3).

Public Safety

The strength of the family may also influence patterns of crime at the national level. This, in turn, could have implications for the health of the economy, insofar as crime discourages economic growth (Detotto and Otranto Reference Detotto and Otranto2010). A number of scholars (Akerlof Reference Akerlof1998; Nock Reference Nock1998; Sampson, Laub, and Wimer Reference Sampson, Laub and Wimer2006) have argued that marriage fosters male responsibility and discourages crime. As Sampson, Laub, and Wimer (Reference Sampson, Laub and Wimer2006, p. 467) note, marriage discourages crime among men inclined to criminal activity because “it creates interdependent systems of obligation, mutual support, and restraint that impose significant costs for translating criminal propensities into action.” Marriage also encourages men to engage in ordinary work-related routines, rather than deviant activities, and to spend less time with friends and acquaintances who might encourage criminal activity (Nock Reference Nock1998; Sampson, Laub, and Wimer Reference Sampson, Laub and Wimer2006). Marriage, then, is an important social control mechanism reducing the likelihood that men engage in delinquent or criminal acts.

Moreover, strong families reduce the odds that children engage in delinquent or criminal behavior as adolescent and young adults. Two-parent families tend to provide more attention and monitoring of children and adolescents (McLanahan and Sandefur Reference McLanahan and Sandefur1994), both of which discourage delinquent and criminal activity. Boys, for instance, who are raised in intact-married families are less delinquent, less criminally active, and less likely to be incarcerated, according to research in the United States (Antecol and Bedard Reference Antecol and Bedard2007; Harper and McLanahan Reference Harper and McLanahan2004). In Sweden, substance abuse and suicide are higher among children raised in single-parent homes (Weitoft et al. Reference Weitoft, Hjern, Hagland and Rosén2003). At the community level, communities with more two-parent families have less violent crime, at least based on research at the neighborhood and state levels in the United States and Canada (Lerman, Price, and Wilcox Reference Lerman, Price and Wilcox2017; Sampson Reference Sampson1987; Wong Reference Wong2011).

The connections between family structure and crime, both at the individual and the community levels, matter because crime tends to inhibit prosperity. Specifically, high levels of crime discourage male labor force participation (Eberstadt Reference Eberstadt2016), force businesses to spend more on security, and lead to significant public-sector costs. As the economists Detotto and Otranto (Reference Detotto and Otranto2010) note, “Criminal activity acts like a tax on the entire economy: it discourages … direct investments, it reduces firms’ competitiveness, and reallocates resources creating uncertainty and inefficiency.”

How, then, is family structure associated with violent crime? Using data from the United Nations Office on Drugs and Crime (UNODC), we find a strong negative association between the proportion of children raised in two-parent families and violent crime rates. Figure 8.5 indicates that the average homicide rate is more than four times larger in the countries in the bottom third of countries in terms of children living with two parents compared to countries in the top third. This association leads us to hypothesize that strong and stable families foster higher levels of public safety. In turn, we think that lower levels of crime are linked to stronger economic growth, ceteris paribus, thereby helping to explain any associations between family structure and economic growth in nations across the world.

Figure 8.5 Homicide rate, by proportion of children in two-parent families: 2001–2015

Note: The y-axis in this figure provides the homicide rate based on data from the United Nations Office on Drugs and Crime for the years 2001–2015. The x-axis splits the sample of countries into terciles based on the fraction of children being raised by two parents based on data from the World Bank, OCED, and the DHS. The sample includes 397 country-year observations from 83 countries representing the following regions: Africa (24), the Americas (11), Asia (16), Europe (30), and Oceania (3).

Educational Attainment

A long-standing literature suggests that higher levels of human capital increase growth (Aghion et al. Reference Aghion, Boustan, Hoxby and Vandenbussche2009). Moreover, research across the developed world indicates that children from intact, two-parent families are more likely to flourish in school. Such children usually enjoy access to more income, more parental attention and affection, and more stability in their lives, all of which help them excel in school (e.g., McLanahan and Sandefur Reference McLanahan and Sandefur1994). In other words, higher rates of marriage and children being raised in two-parent families might produce greater human capital in countries around the globe.

For instance, research in the United States indicates that children from intact, married families are more likely to complete a high school diploma and graduate from college, compared to children from intact families (Duncan and Duncan Reference Duncan and Duncan1969; Kearney and Levine Reference Kearney and Levine2017; Rumberger and Larson Reference Rumberger and Larson1998; Sandefur, McLanahan, and Wojtkiewicz Reference Sandefur, McLanahan and Wojtkiewicz1992). Moreover, the economist Jonathan Gruber has found that adults who were exposed to higher divorce rates in their state as children have lower levels of educational attainment (Gruber Reference Gruber2004). In general, then, research indicates not only that children are more likely to acquire human capital in the United States when they are raised in stable, two-parent homes, but that there are benefits to all children when higher proportions of school children are from stable two-parent homes.

Outside the United States, children in developed countries are less likely to be held back in school and more likely to do well on standardized tests if they come from two-parent families. Children from single-parent households in countries as diverse as Sweden, Singapore, and Indonesia, for instance, are at least 70 percent more likely to be held back in school, compared to their peers from two-parent families (Scott et al. Reference Scott, DeRose, Lippman and Cook2013). In Europe, research also indicates that children from single-parent families are more likely to skip school, compared to children in two-parent families, as Garriga and Berta point out in Chapter 6.

In general, then, in much of the developed world, children may benefit educationally from the higher levels of time, money, and stability found in two-parent families, compared to single-parent families. Given that marriage is a more stable context for the rearing of children, children are more likely to live in two-parent homes in nations where marriage is the dominant pattern when it comes to childbearing (DeRose et al. Reference DeRose, Lyons-Amos, Wilcox and Huarcaya2017). We suspect that higher rates of marriage and two-parent families, then, foster greater educational attainment. This, in turn, is probably one mechanism by which countries that have strong and stable families are likely to experience the highest rates of economic growth.