Marriage And Economic Growth: National Marriage Project Report Finds Major Links

Why Marriage Is Essential For The Economy

Marriage, quite literally, is the lifeblood of the economy, according to a new report released Monday by the National Marriage Project at the University of Virginia. The report, "The Sustainable Demographic Dividend," examined demographic data, such as census records and consumer expenditure surveys, and concluded that economic growth is dependent on healthy marriages.

The University of Virginia researchers found that when people get married and have children, seven sectors of the economy experience tenable growth. The specific sectors are: child care, life and personal insurance, household products and services, health care, food, home maintenance/home services, and pets and toys. By contrast, those industries suffer when marriage and fertility rates are low.

Since the recession hit, marriage and fertility rates have been waning. In 2009, the number of babies born in the U.S. dropped by 2.3 percent. Young Americans want to get married and have kids, says Brad Wilcox, lead researcher on the report, most just can't afford to do it given current unemployment, and underemployment, rates.

"So many American young adults, aged 18 to 46, [indicate] that they’d like two or three kids, or that they’d see two or three kids as the ideal family size. That’s particularly striking because in the wake of the recession the fertility rate has come down to slightly below two kids on average," he says. "What that suggests is that there’s a gap between the number of kids young adults would like to have, and the number they’re actually having."

What does this mean for the economy and for families? We spoke to Wilcox to find out.

What are the major findings in this report?

[In the report] we’re arguing that the economy depends on strong families because families, of course, provide a future customer base, they supply future workers with important human social capital and they also give men an incentive to work harder in the labor force. So when either marriage or fertility are waning, that can have a negative long-term impact on the economy and also, of course, on particular industries. We also point out that people who get married and have kids are more likely to spend money in certain sectors of the economy. In particular, the seven areas we highlight in this report are: child care, life and personal insurance, household products and services, health care, food, home maintenance/home services, and pets and toys. What that means concretely is that companies like Procter & Gamble, Northwestern Mutual life insurance, Target, Home Depot, these kinds of companies are more likely to flourish when Americans get married and have kids.

What is it about marriage as an institution that has such a profound effect on the economy?

[There is] a real premium that men tend to enjoy when it comes to marriage … Men who are married tend to earn more than men who are not married. What we think is happening here is that the act of getting married, and often having kids, encourages men to think in terms not just of their own welfare but of the welfare of their families, and to behave more responsibly... Marriage seems to help men become more responsible, more strategic in their thinking and more oriented towards the long term rather than just having a good time in the present.

[Women are] more likely to accumulate wealth and assets when they get and stay married in part because they’re often pooling their income with their spouse, and partially because they and their spouse tend to adopt a more long-term orientation toward their financial well-being rather than a short-term orientation.

You seem to go back and forth in the report on the impact of women’s work outside the home on fertility; you suggest that it can both increase and decrease fertility. What’s your conclusion?

Historically, there was a very real tension between work and fertility for women. And that’s still the case; in most modern economies, women who do not work full-time in the labor force tend to have more kids. It’s also the case that the developed countries that have the highest fertility rates are ones where they give women more flexibility to combine work and family. I’m thinking here of places like Sweden. In the United States there aren’t a lot of public policies that help women to combine work and family but what’s exceptional about the U.S. economy is that it’s a lot more flexible when it comes to women moving into and moving out of the work force, as compared to many European countries where it’s hard both to move in and to move out of a job easily and quickly … For both of those different reasons, Sweden and the U.S. have comparatively high levels of fertility as compared to countries like Germany, Spain and Japan that haven’t had as strong a tradition of creating a flexible work-family culture for their women … The takeaway here is that from both the corporate end of things and the public policy end of things, we should pursue policies that allow families, including obviously women and especially mothers, to make the best choice for them and their family, and not to have a one-size-fits-all policy that would either favor stay-at-home parents on the one hand and households with both kinds of work on the other hand.

You mention in the report that cohabiting couples are less stable than married couples, which has an effect on economic growth. What makes them less stable?

Marriage is an institution. And Americans often don’t recognize the importance of institutions. But there are a set of norms, a set of practices, we associate with marriage. Things like fidelity, for instance, compromise, sacrifice, mutual aid, that we’re less likely to associate with things like cohabitation. Of course, the attraction of cohabitation is that it gives people the freedom and flexibility to order their romantic lives as they see fit, but the downside is that that freedom and flexibility don’t equal the same degree of commitment or that same degree of long-term orientation. That commitment and that long-term orientation tend to reinforce stability.

There’s [also] a kind of ritual power to weddings. [They] bring together your friends and your family to see you make a commitment to someone else. [Your friends and family] are implicitly standing not just with you there at that moment in time, but moving forward throughout your relationship. I think that most of us are more committed to, more deliberate about, more hard-working when it comes to our married relationship as compared to our cohabiting relationship, in part because we have stood up before our friends and family and made a commitment about this person and this relationship.

One of the suggestions you have for families in the report is to return to a kind of ‘thriftiness’ that defined family life in earlier decades. How do you reconcile that notion of thriftiness within families and the need for families to spend money to support the economy?

In the short term, thrift is going to be associated with a relative reduction in consumer spending, so there may be a short-term hit that the economy takes if people become more thrifty … [But] one of the reasons that we had this recession was that people were spending beyond their means when it came to both credit card expenditures and home purchases. If you think, too, about the state of our governments across many developed countries, from Japan to the United States to Greece, countries have been spending beyond their means. At some point, the bill comes due and often in ways that are really traumatic, both economically and socially. The point here simply is that, at a variety of levels, we have to be more thrifty or more prudent in our spending, both at the political level and at the household level.

What can be done to encourage more stable marriages?

At the corporate level, companies do have a lot of power when it comes to shaping their internal culture; creating a culture that’s friendly to families, that makes it as easy as possible for people to work around their family schedules. Are they, for instance, offering their employees family plans that may be helpful to them as a couple and as a family, and make them better employees as well? They have even more influence when it comes to advertising. To go back to P&G again, it’s one of the biggest advertisers in the United States; are they thinking intentionally about how the message that’s embedded in their advertising does or does not encourage a family-friendly ethos?

On the public policy side of things, I would endorse things like efforts to increase the child tax credit, and keeping it fully refundable, which would put more money in the pockets of working-class and poor families. It would help to fill out, to some degree, the economic foundations of family life in many working-class and poor communities. But also it would be helpful to middle-class families. This idea of increasing the child tax credit from $1,000 to $5,000, and limiting that to kids who are in the household, would not be discriminatory but I think it would make family life more economical and it’s a concrete idea.

We could [also] do a lot better job in this country of improving our vocational educational system to bring it up to par with a country like Germany. That might seem kind of far afield, but the point is that I think one of the reasons we’re seeing marriages fail to form in the first place, and break down in the second place, is that many working-class and poor Americans don’t have the skills and training that they need to get a decent-paying job, and that has implications for their capacity to get and stay married.

There’s no silver bullet here, but there are a number of things that we could look into to improve both the economic and the cultural climate for families in the United States, as well as around the world.

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