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Institute for American Values Institute for Marriage and Public Policy - page 5 / 44

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Executive Summary

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HIS STUDY PROVIDES THE FIRST RIGOROUS ESTIMATE of the costs to U.S. taxpayers of high rates of divorce and unmarried childbearing both at the national and state levels.

Why should legislators and policymakers care about marriage? Public debate on marriage in this country has focused on the “social costs” of family fragmentation (that is, divorce and unwed childbearing), and research suggests that these are indeed extensive. But marriage is more than a moral or social institution; it is also an economic one, a generator of social and human capital, especially when it comes to children.

Research on family structure suggests a variety of mechanisms, or processes, through which marriage may reduce the need for costly social programs. In this study, we adopt the simplifying and extremely cautious assumption that all of the taxpayer costs of divorce and unmarried childbearing stem from the effects that family fragmentation has on poverty, a causal mechanism that is well-accepted and has been reasonably well-quantified in the literature.

Based on the methodology, we estimate that family fragmentation costs U.S. tax- payers at least $112 billion each and every year, or more than $1 trillion each decade. In appendix B, we also offer estimates for the costs of family fragmenta- tion for each state.

These costs arise from increased taxpayer expenditures for antipoverty, criminal jus- tice, and education programs, and through lower levels of taxes paid by individuals who, as adults, earn less because of reduced opportunities as a result of having been more likely to grow up in poverty.

The $112 billion figure represents a “lower-bound” or minimum estimate. Given the cautious assumptions used throughout this analysis, we can be confident that cur- rent high rates of family fragmentation cost taxpayers at least $112 billion per year. The estimate of $112 billion per year is the total figure incurred at the federal, state, and local levels. Of these taxpayer costs, $70.1 billion are at the federal level, $33.3 billion are at the state level, and $8.5 billion are at the local level. Taxpayers in California incur the highest state and local costs at $4.8 billion, while taxpayers in Wyoming have the lowest state and local costs at $61 million.

If, as research suggests is likely, marriage has additional benefits to children, adults, and communities, and if those benefits are in areas other than increased income lev- els, then the actual taxpayer costs of divorce and unwed childbearing are likely much higher.

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