How Economic Inequality Drives Family Formation and Dissolution26 Jan 2020
Andrew Cherlin weighs in on the chicken and egg question as applied to the question of economic and familial stability in the following excerpt from his essay, “How Inequality Drives Family Formation: The Prima Facie Case.”
I want to make a simple case that rising income inequality has been an important driver of changes in the formation and dissolution of families. Think of the argument I am making as a prima facie case—a set of facts that establishes the likelihood that an argument is true, even though it does not prove it. The prima facie case for the causal importance of income inequality rests on two basic trends.
The first trend is the growth since about 1980 of the earnings differential between the university-educated and the less-educated. This gap reflects the relative decline in job opportunities in the middle of the labor market—the kinds of jobs that people without university degrees are qualified for. Much of the automation and offshoring has occurred among manual occupations that had been seen as men’s work due to their physical, often repetitive, nature at a factory or a construction site. In contrast, demand for high-skilled professional, managerial, and technical workers remained strong—a development that economists refer to as skill-biased technical change. Consequently, we have seen a growing earnings gap between middle-skilled workers, who tend to have a secondary-school education, and highly-skilled workers, who tend to have a university education. The rising earnings gap has increased inequality by hollowing out the middle of the income distribution. It has produced what some have called the hourglass economy—a metaphor for the pinched middle. The polarization of low-paying and high-paying jobs, with fewer mid-level jobs in between, creates a higher level of income inequality.
The second basic trend consists of the divergent paths that family structure has taken during the same period, according to the educational levels of the adults involved. In the 1950s, marriage was ubiquitous. The central position of marriage in family life began to erode in the 1960s and 1970s; but crucially for my argument, the trends in marriage and childbearing were initially moving in the same direction for adults at all educational levels: marriage was being postponed, cohabitation was increasing, and divorce rates were rising. But since about 1980, the family lives of those with a university degree, or the highly-educated, and those with less education have diverged. Family life among the highly-educated remains focused on marriage as the context for raising children. Although the highly-educated marry at later ages, they ultimately have higher lifetime marriage rates than do those with less education. In addition, the divorce rate for highly-educated couples has declined sharply since its peak around 1980. Meanwhile, the percentage of births outside of marriage among the highly-educated has remained low. In contrast, the family lives of people with a secondary school degree but not a university degree, whom we may call the moderately educated, have moved away from stable marriage. This group has experienced a surge of births within cohabiting unions. Unlike the typical cohabiting unions in some European countries, these unions tend to be brittle and to lead to disruptions at a high rate. In fact, the greatest change in children’s living arrangements since 1980 has occurred among the moderately-educated, among whom the share of children living with single mothers and cohabiting mothers has increased dramatically.
Thus, it is among the moderately educated that we see both the greatest change toward nonmarital, unstable living arrangements for having and rearing children and the greatest erosion of labor market opportunities—and we see both trends commencing at roughly the same point in time. This is the prima facie case for the proposition that rising income inequality has been an important indicator of changes in family formation—a marker for the deterioration of the middle of the labor market, especially for men, and an improvement in the labor market for the university educated. Those who experienced a deteriorating job market trended toward less stable family environments. Those who experienced an improvement in the job market trended toward stable, marriage-based family environments.
To be sure, one must be careful in attributing social change solely to economic inequality. It has become the go-to explanation for a wide variety of social phenomena, and no social phenomenon can explain everything. Still, the prima facie case that inequality—and more specifically the diverging labor market opportunities for the highly-educated and the moderately-educated—has driven family formation and dissolution seems strong for the United States. Granted, had cultural changes such as the greater acceptability of cohabitation and nonmarital childbearing not occurred, we would not have seen the same retreat from marriage and marital childbearing. But had employment opportunities for secondary-school educated men not deteriorated, we would probably not have seen the same retreat, either. Culture alone cannot explain the divergent paths by which the university-educated and the non-university educated are forming and maintaining families. It seems highly likely that one must take into account the economic changes that have occurred in our increasingly unequal American society.
Adapted from Andrew Cherlin’s essay in the book, Unequal Family Lives: Causes and Consequences in Europe and the Americas (Cambridge University Press, 2018).