Welfare Is Not Friendly to Family Formation
The "marriage penalty" is real, and it's hampering family development.
The last thing couples should face when contemplating tying the knot is a “marriage penalty.” Sadly, thanks to America’s onerous welfare system, that’s something many couples are taking into account. “Does Social-Welfare Policy Affect Family Formation?” That’s the question at the heart of a new study, “Marriage, Penalized,” by researchers W. Bradford Wilcox, Joseph P. Price, and Angela Rachidi. The evidence, while not comprehensive, does appear to draw a link between welfare eligibility and marriage among certain groups.
According to the study, “Today, more than four in ten families in America receive some kind of means-tested government assistance, from Medicaid to food stamps. The expanding reach of the welfare state means that a substantial share of lower-middle-class couples with children receive such aid — and many of these couples receive more generous support if they are unmarried [emphasis added]. That’s especially the case if their total income as a cohabiting couple is not considered in determining their eligibility for assistance, as often appears to be the case.” As the authors go on to deduce, “To use the term of public policy analysts, these couples face a ‘marriage penalty,’ where it makes more financial sense for them to cohabit rather than marry.” For example:
“Our analysis of American couples whose oldest child is two years or younger indicates that 82 percent of those in the second and third quintiles of family income ($24,000 to $79,000) face this kind of marriage penalty when it comes to Medicaid, cash welfare, or food stamps. By contrast, only 66 percent of their counterparts in the bottom quintile (less than $24,000) face such a penalty.”
This translates to a form of marriage disincentive for some couples. “In sum,” the executive summary adds, “our findings suggest that marriage penalties related to means-tested benefits do not discourage marriage among the poorest families in the U.S. But marriage penalties may play a role in discouraging marriage among lower-middle-class families.” The welfare state, though its designers had good intentions, has many problems, one of which the evidence suggests is a detrimental effect on the family — a core feature of a healthy, bedrock society.