Marriage and the Economy
Not until the withdrawal from marriage of the last fifty years has the West been able to see so clearly its powerful contribution to all aspects of society including the economy.
Gary Becker’s work brought the family back into economics (where it had been the foundational unit of economics in the beginning, as laid out by the common sense of Aristotle). Becker’s vein of research has gained more traction and has influenced the work of many other Nobel Laureates, including Robert Lucas (1995): macro growth theory of expectations; James Heckman (2000): econometric theory of samples; and George Akerlof (2001): Keynesian market economics.
Marriage makes men different. And if it does not, their marriages either end or are unhappy.
Among the economic differences that marriage makes in men, two stand out: they work harder (married men are more productive, and an area’s minor dependency ratio is strongly associated with employment among adult men aged 25 to 54), and thus earn more (their incomes increase 26 percent).
Conversely, divorce has a major negative impact, reducing the income of the child-raising household by 30 percent or more while driving down the growth rate of the economy by one sixth every year for the last 20 years. This latter happens because divorced men, on average, decrease their productivity enormously.
In education, the precondition for a good wage in the modern economy, marriage is a key ingredient to the productivity of children in their learning. The early home environment lays down a foundation that has an extremely powerful effect later in life. Children born into a married family have a tremendous educational advantage, which is evidenced by graduation rates right through to the college level.
Married families are much more economically efficient households, a characteristic that is not measured in GDP accounting. What is invisible here is the real resource efficiency of a major section of the economy (the home economy). Many married home economies do much better internally because of this totally neglected aspect of productivity.
As the poor and the working class (even into the middle class quintile 3) withdraw from marriage, the productivity of the U.S. declines and the burden on the welfare system increases. Furthermore, the success of the social and welfare policies developed over the last decades greatly depend on the health of marriage. Failing to recognize this dependence, U.S. welfare policies continue to fail to lift people out of poverty (even as the economy grows and world markets massively expand).
Marriage is increasingly the dividing line between those who can learn, who can work in an information economy, who save, who own their own homes, who live happier lives, and who live healthier and longer.
Until now, marriage has been the hidden ingredient of a vibrant economy.