The economic impact of family structure

"If we want to talk constructively about issues such as poverty or income inequality, we need to bring what has happened to the family into the picture" -Nick Schulz

Today's public policy discussions about economic inequalities and wealth disparity mostly fail to consider the impact of the enormous changes which have taken place in the structure of the American family over the last half century. In Home Economics: The Consequences of Changing Family Structure (AEI Press, Values & Capitalism Series, 2013), Nick Schulz explains why it is no longer possible to write about economic topics without reference to these dramatic shifts in family structure.

As the American economy continues to shift from one built on brawn to one built on brains and social skills, the changing environment increasingly relies on education, a willingness to learn and solve problems, as well as useful social and personality skills.

Schulz finds that family structure:

  • influences the economic mobility of children. Children of continuously married parents are more likely than children of divorced parents or children of single parents to move up the rungs of the economic ladder during working years.
  • is crucial in developing cognitive skills necessary for reasoning and analytical thinking and needed to perform well in any job.
  • helps develop character and empathy and the ability to put longer goals ahead of short-term desires.

At the same time, Schulz identifies three big changes:

1.    An increasing number of Americans are never getting married:
In 1960, about 75% of adults were married. In 2011, fewer than 50 % of households were made up of married  couples. In 1970, 12% of women 25-29, never married vs. 48% in 2008 (7% of women 30-34 in 1970 vs. 28% in 2008).
In 1970, 20% of men 25-29 never married vs. 61% in 2008 (11% of men 30-34 in 1970 vs. 37% in 2008).
2.    Out of wedlock births: Only 5% of children were born out of wedlock in 1960. In 2010, the percentage of births to unmarried women was over 40%.
3.    Divorce: The divorce rate has declined in recent years but it is still higher than in the early 1960s (at its low point).

There are many reasons for not wanting to talk about the American family. Many would like to avoid difficult conversations about what is seen as a personal issue or an issue of individual morality. Yet, as Nick Schulz demonstrates, the collapse of the American family should be studied, as it is one of the most important economic facts of our time.

As the former DeWitt Wallace Fellow, Nick Schulz wrote about economic issues while at the American Enterprise Institute. He is the co-author of Invisible Wealth: The Hidden Story of How Markets Work (2011) and From Poverty to Prosperity: Intangible Assets, Hidden Liabilities and the Lasting Triumph over Scarcity (2009).

This monograph is part of the Values and Capitalism initiative at the American Enterprise Institute. Intended primarily for college students, the series of 13 books is devoted to the study of the moral and material nature of a free-market economy. The project's goal is to engage Christian students in a discussion of the compatibility of their faith and the system of free enterprise.


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