Will Minimum Wage Increases Improve Family Stability?

by Alan J. Hawkins

Highlights
A 7 to 15% reduction in divorce over a one- to two-year period following a $1 raise in the minimum wage seems too good to be true.

Attacking the problem of family instability systemically and from multiple angles is a better strategy than relying only on economic levers.

Category: PUBLIC POLICY,ECONOMIC MOBILITY,MARRIAGE AND RELATIONSHIP EDUCATION


We haven’t heard much over the past year about a legislative proposal to raise the federal minimum wage. It was a hot topic a year ago when the non-partisan Congressional Budget Office released its report estimating that President Biden’s call for a $15 minimum wage would lift nearly a million poor out of poverty—but would cost nearly 1.5 million jobs over the next four years. JPMorgan CEO Jamie Diamon may have reignited the discussion recently, however, when he called for the federal government to increase the minimum wage to $15 (and increase the Earned Income Tax Credit, too).

As a family scientist, I am keenly interested in the potential of state-by-state or federal minimum wage policies (and other economic policy levers) to increase the economic well-being of poor children and adults and support greater family stability. Which is why a new study in the Journal of Marriage and Family jumped out at me. The study explored the effects of minimum wage increases on marriage and divorce rates. Lead author Ben Karney used two high-quality federal data sets (Current Population Survey, American Community Survey) and a quasi-experimental design that took advantage of the reality that some states have raised their minimum wages over time (2004-2015), and some have not. The researchers compared states that raised the minimum wage to those that did not to see if they could detect a statistical effect on marriage and divorce rates.

They found that a $1 increase in the minimum wage predicted a 3 to 6% decline in marriage entries and a 7 t0 15% decrease in marriage exits one to two years later. They interpret both these findings as positive changes for families. With regards to a lower marriage rate, the researchers speculate that a better financial situation allows poorer young couples to delay marriage to be more in line with the marital-timing decisions of more affluent couples. They connect later marriages to reduced divorce rates, which may be less likely to end in divorce. This could account for the observed reduced divorce rates.

If this straightforward policy proposal would decrease divorce rates by 7 to 15%—or more if raises are higher—I would be an enthusiastic cheerleader, pom-poms and all. But scientists are actually trained to be skeptics. So, please pardon me if I press pause on the celebration.

First, I’m not confident in the authors’ logic that delayed marriages lead to more stable unions. While that was the case at one time, recent research suggests that early marriages are no longer inferior in quality and stability to later marriages. In three recent nationally representative datasets, my team of researchers found that differences in early first marriages (age 20-24) and later marriages (25+) were generally small and usually favored early marrieds. Even marital stability differences were negligible. Those who marry early now are different from those who married early a generation or two ago. With no social pressure to marry early (and even a stigma against it), they marry because they really want to make a strong commitment.

Also, Karney and his colleagues did not present the results of extensive testing for alternative explanations of the changes in marriage and divorce rates that is best practice in these kinds of quasi-experimental policy evaluation studies, especially when taking on such a complex issue. The authors do confess appropriately that their “analyses could not determine whether declines in rates of marriage and divorce represented transitions deferred or decisions to forego these transitions entirely,” but they seem to use the half-full lens—marital decisions are delayed and divorce decisions are deferred.

Moreover, a kind of scientific horse sense also raises an eyebrow at the size of the effects the researchers found, especially for divorce rates. A 7 to 15% reduction in divorce over a one- to two-period following a $1 raise in the minimum wage seems too good to be true. Even social policy mechanisms directly targeted to a specific problem would struggle to achieve such success. Human behavior is highly complex. And it is “multi-systemically” determined, to use a fancy scientific term that means that psychological, relational, contextual, sociological, and economic forces would all be operating and interacting simultaneously on people’s marital-transition decisions. The impact of any single cause—such as an increase in wages—is most likely to be small by itself.

Furthermore, the study’s authors should have wrestled with a recent study that cast doubt on the effects of wage increases on family formation behavior among poorer families. Melissa Kearney and Riley Wilson studied the effect of sudden wage increases from fracking jobs in the 2000s on marriage and childbearing. They found that these large increases in wages for mostly non-college-educated men were not associated with a greater likelihood of marrying—as theory predicted—but they were associated with increases in births (marital and nonmarital). Again, family behavior is complex. Economics certainly are relevant to family behavior, but faith in the notion that economics dominate human decisions in straightforward ways is regularly challenged. Kearney and Wilson conclude that the effects of economic factors on family behavior are highly subject to varying and changing social norms and temporal contexts.

One can hope that further research on the effects of minimum wage increases will indeed show positive effects on family stability, although those effects are likely to be smaller than what Karney and his colleagues found. (I’m not sure yet what to make of the lower marriage rate effect.) And I disagree with the authors’ conclusion that policy efforts to increase family stability should be focused solely on indirect economic policy levers and should abandon “expensive” funding of educational programs that try to help low-income couples form and sustain healthy marriages and relationships. They argue:

government policies that reduce stress on couples and facilitate their access to resources may improve family outcomes, invisibly and without making additional demands on the time of couples who are already strained.

The authors seem bothered by the popularity of these educational programs that draw nearly 200,000 lower-income individuals to their doors every year (and generally are about 12 hours in length over six weeks). They also fail to mention that all of these federally-funded programs now include employment-support program options along with relationship education. Policymakers understand that economic forces operate alongside relational forces. Karney and his colleagues see these programs as a waste of taxpayer dollars ($75 million a year) and cite dated research showing that these couple relationship education programs have had “negligible effects” on family outcomes. More extensive and recent reviews of these programs find that their effects do appear to be small—similar to other social policy programs such as Head Start—but they are statistically significant and appear to be getting stronger over time.

Either-or, one-lever thinking about how to increase family stability seems unmerited. We need all kinds of good ideas in this fight. Attacking the problem of family instability systemically and from multiple angles is a better strategy than relying only on economic levers. We aren’t going to find a magic wand in our efforts to increase family stability, although I am intrigued by the authors’ findings and hope that higher wages will support more stable families. Instead, we need sustained hard work from practitioners, policy makers, and researchers testing multiple direct and indirect approaches to helping families stay together in loving bonds.

Alan J. Hawkins is a professor of family life at Brigham Young University.