MARRIAGE AND THE FAMILLY:

Economic Issues and Application

Chapter 4

RACE AND FAMILY STRUCTURE

Does Race Impact Households forming a Family

The Answer is YES It can be seen in your text, Table 4.1

RACE DIFFERENCES IN MARITAL AND FAMILY STATUS, 2002

  WHITE (%) BLACK (%)

AMONG ALL WOMEN, AGE 15+ MARRIED, SPOUSE PRESENT NEVER MARRIED

 53.622.4

 29.242.0

AMONG ALL WOMEN. AGE 40-44 MARRIED, SPOUSE PRESENT NEVER MARRIED

 71.48.8

 41.029.3

AMONG ALL FAMILIES WITH CHILDREN < AGE 18 %TWO PARENTS %FEMALE HOUSE HOLDER

  

77.017.7

  

42.851.2

AMONG ALL CHILDREN %RESIDING WITH TWO PARENTS %RESIDING WITH MOTHER ONLY

 74.517.9

 38.548.1

RACE DIFFERENCES IN MARITAL AND FAMILY STATUS

This difference leads to two questions: When did these differences develop? Why did they develop?

It is clear from the graph in your text Fig 4.1 that there has been a big difference in the percentage of married women since 1950

PROPORTION OF WOMEN AGE 15 AND OLDER, MARRIED, BY RACE,

1950-2002

80 %

70 %

60 %

50 %

40 %

30 %

20 %

1950 1960 1970 1980 1990 2002

WHITE

BLACK

RACE DIFFERENCES IN MARITAL AND FAMILY STATUS

Clearly in the mid 60s thru perhaps the 1980s

So then the question is WHY? One possibility is the Rate of Divorce The graph 4.2 in your text

CHANGES IN THE MARITAL STATUS OF BLACK WOMEN, 1950-2002

60 %

50 %

40 %

30 %

20 %

10 %

0 %

1950 1960 1970 1980 1990 2002

NEVER MARRIED

DIVORCED

RACE DIFFERENCES IN MARITAL AND FAMILY STATUS

Clearly it appears the NEVER MARRIED accounts for more than the Divorced category

Furthermore Female Householders Increased.

Or in other words, number of children raised in two parent household decrease during this same period

CHILDREN UNDER AGE 18 IN TWO-PARENT FAMILIES BY RACE,

1960-2002

90 %

80 %

70 %

60 %

50 %

40 %

30 %

1960 1970 1980 1990 2000

WHITE

BLACK

Is family structure an Economic Issue Family structure is currently a very heated

“social” issue It has some economic implications in that

some structures are likely to have a given economic status

Again from your text table 4.2

FAMILY INCOME AND POVERTY STATUS OF INDIVIDUALS BY FAMILY STRUCTURE AND RACE,

2000

  WHITE BLACK

MEDIAN FAMILY INCOME TWO-PARENT FAMILY MOTHER-ONLY FAMILY AS PERCENT OF TWO-PARENT

 $59,953$28,37147.3%

 $50,741$20,39540.2%

POVERTY RATE TWO-PARENT FAMILY MOTHER-ONLY FAMILY

 7.7%22.1%

 20.8%38.7%

Economic Explanations for the Divergence in the Marital Status of White and Blacks

Marriage Market

Women’s Wage Rates

The Welfare System

Marriage Market In Chapter 3, we saw that there is a surplus

of White Males (shortage of white females) and

A surplus of Black and Hispanic females (shortage of Black and Hispanic males)

That comparison however, may not be specific enough to determine the marriage market

Marriage Market Mid 1980s sociologist William Julius Wilson

wrote two books that become standard in the literature: The Truly Disadvantage and When Work Disappears.\

In The Truly Disadvantage he argues that low skilled jobs decreased and consequently the job prospects of many Black Males decreased

Consequently, the marriage prospects of Black females decrease as well

Marriage Market William Julius Wilson developed

the Male Marriageable Pool Index

groupracebyagesametheinwomenofnumber

groupracebyageinmenemployedofNumberMMPI

MMPIs BY AGE, RACE, AND YEAR

  1960 1970 1980 1990 2000

AGE 20-24 BLACK WHITE

 6868

 5863

 5072

 5175

 4983

AGE 25-34 BLACK WHITE

 7186

 7387

 6385

 6593

 6489

THE MMPI AND THE PROPORTION OF FAMILIES HEADED BY WOMEN, 1960-80, BY RACE

REGION AND RACIAL GROUP

PERCENTAGE POINT CHANGE IN MMPI

(1980-1960)

PERCENTAGE POINT CHANGE IN PROPORTION OF FAMILIES

HEADED BY WOMEN

NORTHEAST BLACK WHITE

 -11.2-2.2

 24.46.2

NORTH CENTRAL BLACK WHITE

  

-12.5-3.6

  

26.35.8

SOUTH BLACK WHITE

 -6.12.4

 15.63.9

WEST BLACK WHITE

 -2.7-.9

 18.09.4

Women’s Wage Rates The impact can be:

The closer female/male wage ratio the less the benefits for the female (and even the male) from marriage

Higher the female wages the higher the opportunity cost of marriage

An example of this can be found in the data from Mexico presented below

Women Marital StatusIn Mexico

Mexico Female Not Married Civil Religious Both Cohabitating Seperated Divorced Widow Not Specified 69,235,053.00 37.07% 12.75% 2.04% 29.72% 10.26% 2.60% 0.99% 4.32% 0.26%12 - 14 years 9.23% 99.46% 0.12% 0.03% 0.10% 0.24% 0.02% 0.01% 0.02% 0.00%15 - 19 years 14.43% 87.95% 3.44% 0.27% 1.74% 5.61% 0.41% 0.04% 0.05% 0.49%20 - 24 years 13.10% 54.38% 13.66% 1.40% 13.82% 14.28% 1.58% 0.30% 0.21% 0.37%25 - 29 years 11.78% 28.26% 19.11% 2.35% 30.57% 16.04% 2.28% 0.73% 0.43% 0.24%30 - 34 years 10.31% 15.56% 19.89% 2.79% 41.64% 15.03% 2.95% 1.17% 0.79% 0.19%35 - 39 years 9.18% 10.60% 19.08% 3.00% 46.82% 13.74% 3.62% 1.61% 1.39% 0.16%40 - 44 years 7.50% 8.24% 17.71% 2.94% 50.08% 11.98% 4.30% 2.08% 2.50% 0.17%45 - 49 years 5.88% 7.07% 16.21% 3.12% 51.70% 10.72% 4.70% 2.19% 4.12% 0.16%50 - 54 years 4.85% 6.62% 14.42% 3.08% 52.26% 9.23% 5.07% 2.21% 6.94% 0.18%55 - 59 years 3.70% 6.04% 13.28% 3.28% 51.72% 8.21% 5.00% 1.88% 10.39% 0.18%60 - 64 years 3.17% 6.02% 11.63% 3.23% 48.72% 7.23% 4.81% 1.61% 16.53% 0.25%65 and above 6.86% 5.74% 8.08% 2.83% 38.81% 5.06% 3.56% 1.19% 34.27% 0.46%

Women Marital StatusIn the State of Baja California

Baja California Female Not Married Civil Religious Married Cohabitating Seperated Divorced Widow Not Specified 1,655,051.00 34.95% 18.06% 0.83% 21.42% 15.62% 3.16% 1.79% 3.57% 0.61%12 - 14 years 7.93% 99.25% 0.17% 0.04% 0.09% 0.36% 0.04% 0.01% 0.03% 0.01%15 - 19 years 13.34% 85.09% 3.51% 0.12% 1.05% 8.58% 0.59% 0.07% 0.06% 0.93%20 - 24 years 14.02% 50.72% 15.82% 0.51% 8.65% 20.81% 2.02% 0.55% 0.24% 0.69%25 - 29 years 13.95% 26.47% 24.23% 0.87% 20.16% 23.27% 2.73% 1.26% 0.44% 0.56%30 - 34 years 11.95% 15.09% 27.16% 1.03% 28.06% 21.94% 3.47% 2.00% 0.73% 0.52%35 - 39 years 9.99% 10.75% 27.21% 1.19% 32.46% 19.71% 4.17% 2.78% 1.23% 0.50%40 - 44 years 7.65% 8.57% 26.02% 1.21% 35.41% 17.46% 4.94% 3.58% 2.25% 0.55%45 - 49 years 5.61% 7.39% 24.11% 1.28% 38.18% 15.24% 5.54% 3.94% 3.76% 0.55%50 - 54 years 4.44% 6.73% 21.50% 1.34% 40.18% 12.86% 6.04% 4.15% 6.58% 0.63%55 - 59 years 3.24% 6.26% 19.41% 1.38% 40.59% 11.03% 6.42% 3.62% 10.68% 0.61%60 - 64 years 2.67% 5.97% 16.97% 1.52% 38.93% 9.30% 6.13% 3.10% 17.27% 0.82%65 and above 5.21% 6.06% 12.29% 1.35% 31.76% 6.31% 4.80% 2.43% 33.99% 1.01%

Women Marital StatusIn the State of San Luis Potosi

San Luis Female Not Married Civil Religious Married Cohabitating Seperated Divorced Widow Not Specified 1608645 38.18% 9.22% 1.29% 36.87% 7.27% 2.09% 0.57% 4.30% 0.21%12 - 14 years 10.34% 99.51% 0.11% 0.02% 0.11% 0.20% 0.02% 0.01% 0.02% 0.00%15 - 19 years 15.00% 88.99% 3.09% 0.15% 2.04% 4.92% 0.33% 0.02% 0.04% 0.41%20 - 24 years 12.37% 54.59% 12.41% 0.90% 18.36% 11.76% 1.30% 0.17% 0.19% 0.31%25 - 29 years 10.79% 27.60% 15.89% 1.43% 40.62% 11.57% 1.87% 0.46% 0.40% 0.16%30 - 34 years 9.66% 15.25% 15.19% 1.56% 54.12% 10.01% 2.34% 0.70% 0.69% 0.14%35 - 39 years 8.67% 10.74% 13.45% 1.65% 60.14% 8.84% 2.89% 0.98% 1.20% 0.11%40 - 44 years 7.15% 8.77% 11.59% 1.86% 62.78% 7.92% 3.44% 1.25% 2.25% 0.13%45 - 49 years 5.68% 7.54% 10.45% 2.12% 63.75% 7.29% 3.81% 1.17% 3.75% 0.12%50 - 54 years 4.85% 7.19% 9.18% 2.28% 63.01% 6.76% 4.14% 1.13% 6.16% 0.15%55 - 59 years 3.88% 6.45% 8.32% 2.56% 62.32% 5.95% 4.10% 1.03% 9.09% 0.18%60 - 64 years 3.58% 6.66% 7.33% 2.31% 58.45% 5.68% 3.76% 0.86% 14.76% 0.17%65 and above 8.03% 6.41% 5.08% 2.01% 47.12% 4.17% 2.98% 0.71% 31.14% 0.37%

Not Married WomenNot Married Mexico B.C. S.L.P

Total 37.07% 34.95% 38.18%12 - 14 years 99.46% 99.25% 99.51%15 - 19 years 87.95% 85.09% 88.99%20 - 24 years 54.38% 50.72% 54.59%25 - 29 years 28.26% 26.47% 27.60%30 - 34 years 15.56% 15.09% 15.25%35 - 39 years 10.60% 10.75% 10.74%40 - 44 years 8.24% 8.57% 8.77%45 - 49 years 7.07% 7.39% 7.54%50 - 54 years 6.62% 6.73% 7.19%55 - 59 years 6.04% 6.26% 6.45%60 - 64 years 6.02% 5.97% 6.66%65 and above 5.74% 6.06% 6.41%

Married by Type of Marriage` Mexico B.C. S.L.PMarried Civil Religious Both Civil Religious Both Civil Religious Both

Total 12.75% 2.04% 29.72% 18.06% 0.83% 21.42% 9.22% 1.29% 36.87%12 - 14 years 0.12% 0.03% 0.10% 0.17% 0.04% 0.09% 0.11% 0.02% 0.11%15 - 19 years 3.44% 0.27% 1.74% 3.51% 0.12% 1.05% 3.09% 0.15% 2.04%20 - 24 years 13.66% 1.40% 13.82% 15.82% 0.51% 8.65% 12.41% 0.90% 18.36%25 - 29 years 19.11% 2.35% 30.57% 24.23% 0.87% 20.16% 15.89% 1.43% 40.62%30 - 34 years 19.89% 2.79% 41.64% 27.16% 1.03% 28.06% 15.19% 1.56% 54.12%35 - 39 years 19.08% 3.00% 46.82% 27.21% 1.19% 32.46% 13.45% 1.65% 60.14%40 - 44 years 17.71% 2.94% 50.08% 26.02% 1.21% 35.41% 11.59% 1.86% 62.78%45 - 49 years 16.21% 3.12% 51.70% 24.11% 1.28% 38.18% 10.45% 2.12% 63.75%50 - 54 years 14.42% 3.08% 52.26% 21.50% 1.34% 40.18% 9.18% 2.28% 63.01%55 - 59 years 13.28% 3.28% 51.72% 19.41% 1.38% 40.59% 8.32% 2.56% 62.32%60 - 64 years 11.63% 3.23% 48.72% 16.97% 1.52% 38.93% 7.33% 2.31% 58.45%65 and above 8.08% 2.83% 38.81% 12.29% 1.35% 31.76% 5.08% 2.01% 47.12%

Non-Married Status(other than never married)

` Mexico B.C. S.L.PNon Married Status Cohabitating Seperated Divorced Cohabitating Seperated Divorced Cohabitating Seperated Divorced

Total 10.26% 2.60% 0.99% 15.62% 3.16% 1.79% 7.27% 2.09% 0.57%12 - 14 years 0.24% 0.02% 0.01% 0.36% 0.04% 0.01% 0.20% 0.02% 0.01%15 - 19 years 5.61% 0.41% 0.04% 8.58% 0.59% 0.07% 4.92% 0.33% 0.02%20 - 24 years 14.28% 1.58% 0.30% 20.81% 2.02% 0.55% 11.76% 1.30% 0.17%25 - 29 years 16.04% 2.28% 0.73% 23.27% 2.73% 1.26% 11.57% 1.87% 0.46%30 - 34 years 15.03% 2.95% 1.17% 21.94% 3.47% 2.00% 10.01% 2.34% 0.70%35 - 39 years 13.74% 3.62% 1.61% 19.71% 4.17% 2.78% 8.84% 2.89% 0.98%40 - 44 years 11.98% 4.30% 2.08% 17.46% 4.94% 3.58% 7.92% 3.44% 1.25%45 - 49 years 10.72% 4.70% 2.19% 15.24% 5.54% 3.94% 7.29% 3.81% 1.17%50 - 54 years 9.23% 5.07% 2.21% 12.86% 6.04% 4.15% 6.76% 4.14% 1.13%55 - 59 years 8.21% 5.00% 1.88% 11.03% 6.42% 3.62% 5.95% 4.10% 1.03%60 - 64 years 7.23% 4.81% 1.61% 9.30% 6.13% 3.10% 5.68% 3.76% 0.86%65 and above 5.06% 3.56% 1.19% 6.31% 4.80% 2.43% 4.17% 2.98% 0.71%

The Welfare System Welfare system in the US has its broad

origins in the Social Security Act of 1935 At the time, a program labeled ADC (Aid

to Dependent Children) The Program was later changed to AFDC

(Aid to Families with Dependent Children)

The Welfare System It was not until the late 1950s that the

Federal Government started to reimburse states for participating in AFDC

In the 1960s as part of the War on Poverty the program was expanded and increased the number of individuals eligible

The NEW Welfare In 1994, in part due to the public sentiment

that was voiced by the Clinton Administration

TANF (Temporary Assistance Needy Families) substitute AFDC

PROPORTION OF WOMEN AGE 15 AND OLDER, MARRIED, BY RACE,

1950-2002

80 %

70 %

60 %

50 %

40 %

30 %

20 %

1950 1960 1970 1980 1990 2002

WHITE

BLACK

Note the Increase

Marriage and the Earnings of Men Married men generally earn more income

that single man Even after taking many factors that would be

impacting the difference So it has received the name of:

The Male Marriage Premium

Marriage and the Earnings of Men There may be several reason:

The MPL may be the same but employers pay married man more. This may be possible but not likely in a competitive market

Two other reasons are based on the assumption that MPL (MARRIED) > MPL (SINGLE)

Marriage and the Earnings of Men MARRIAGE PRODUCTIVITY EFFECT.

Here the economies of scale at the household level allows men to become more specialized at the work palce

MARRIAGE SELECTIVITY EFFECT. Here the assumption is that holding all other things constant, men that married tend to be more industrious, more responsible, more courteous, etx

Marriage and the Earnings of Men Korenman and Neumark found that about

the The Male Marriage Premium was about 11%

With about 6% of the 11% coming from the MARRIAGE PRODUCTIVITY EFFECT and the remained from the MARRIAGE SELECTIVITY EFFECT

Divorce There can be gains and losses In an economic sense, divorce is the

decision of the opportunity cost between remaining married and become single again

Again from your Text Table 4.5

ILLUSTRATIVE ANALYSIS OF “GAINS TO DIVORCE”

  CASE 1 CASE 2 CASE 3

CURRENT MARITAL OUTPUT

M = 6F = 6

M = 6F = 6

M = 6F = 6

EXPECTED SINGLE OUTPUT

M = 3F = 7

M = 7F = 7

M = 5F = 8

ANALYSIS F BETTER OFF SINGLE, M WORSE

OFF. TOTAL OUTPUT LARGER IF MARRIED THAN SINGLE (12 VS

10)

BOTH BETTER OFF SINGLE. TOTAL

OUTPUT LARGER IF SINGLE THAN

MARRIED (12 VS 14)

F BETTER OFF SINGLE, M WORSE

OFF. TOTAL OUTPUT LARGER IF SINGLE

THAN MARRIED (13 VS 12)

EXPECTED RESULT

M COULD GIVE 2 UNITS OF MARITAL

OUTPUT TO F, LEAVING HER WITH 8

AND HIM WITH 4. BOTH ARE NOW

BETTER OFF MARRIED THAN

SINGLE. THIS MARRIGE CAN BE

SAVE!

NO REARRENGEMENT OF OUTPUT WITHIN THE MARRIAGE CAN

MAKE ONE PARTY BETTER OFF THAN IF

SINGLE WITHOUT MAKING OTHER

WORSE OFF. THIS MARRIAGE SHOULD

AND PROBABLY WILL END.

TO MAKEF BETTER OFF IN MARRIAGE , M MUST

GIVE MORE THAN 2 UNITS OF MARITAL

OUTPUT TO F, LEAVING HIM WITH FEWER THAN

4 UNITS, F IS NOW BETTER OFF, BUT M IS

WORSE OFF. THIS MARRIAGE SHOULD

AND PROBABLY WILL END.

UNCERTANTY, THE GAINS TO MARRIAGE, AND DIVORCE

%

0 GA Gains to Marriage

(A)

%

0 GO Gains to Marriage

(B)