My research in household finances suggests that marriage is a major determinant of households’ financial fortunes. Married households generally do much better financially, because they have the potential for multiple income streams and the ability to share costs. This week’s posts probe the relationship between changing living arrangements and households finances. In this post, we look at the rising incidence of living outside of paired-unions.
Decline Paired Unions Since 1967
The proportion of households headed by adults in a paired union has declined markedly since 1970. This change is depicted in the figure below, which is based on Census data.1
The proportion of married adults has declined substantially, while the incidence of cohabitation has grown dramatically. Rising cohabitation rates have not fully offset the decline in marriage. In 1967, 70.3% of US adults lived with a spouse, 0.4% lived with a non-spousal partner, and about 7.6% lived alone. By 2015, 51.4% lived with a spouse, 7.5% lived with a non-spousal partner, and 14.4% lived alone. This leaves a substantially smaller proportion of adults living outside a paired union (70.7% in 1967 vs. 58.9% in 2015, a difference of 11.8 percentage points).
Much of this change has produced a rise in adults living alone, which doubled from 7.6% of households in 1967 to 14.4% in 2015.
The remaining adult population appears to have shifted to alternative cohabitation arrangements with non-partners. Other living arrangements, like living with other relatives (9.8% in 1967 to 12.1% in 2015) or non-relatives (1.3% to 3.6%) rose, but the incidence of living with one’s parents is roughly the same as it was decades ago (11% in 2015 vs. 10.6% in 1967)
Do these changes have financial consequences? There are many indications that the answer is yes. Marital status appears to have a significant impact on households’ incomes and net worth. In my forthcoming book, I argue that being in a paired union sways a family’s ability to stay in the middle class. The consequences of being single while having children seem particularly strong, because children require considerable investments of labor that either have to be met by foregoing work or using commercial alternatives.
This does not necessarily imply that staying in a first marriage is critical. Many of these benefits may exist in unmarried cohabitants or recombined families (in which previously divorced adults recombine into a new paired union household). They may also exist in other multiadult household arrangements, like living with a sibling or roommate. These questions will be examined in future posts.
- Census Bureau (2015) “Table AD-3. Living arrangements of adults 18 and over, 1967 to present” Data table from Census Bureau.http://www.census.gov/hhes/families/data/adults.html↩