Single Motherhood and Wealth

August 8, 2014

In an interview with Kimberly Gedeon of MadameNoire.com, Aparna Mathur, resident scholar at the American Enterprise Institute, explains why single mothers are more likely to be poor.

Data from the Pew Research Center suggests that single mothers tend to be younger, are less likely to have an education and are more likely to be black or Hispanic. The numbers are staggering:

  • According to the Organization for Economic Cooperation and Development, 72 percent of black children are born to single mothers.
  • Fifty-five percent of black children live in single-parent homes, in contrast to 21 percent of white children that live in single-parent homes.

Mathur explains that marriage rates -- while they have fallen for both blacks and whites over the last half-century -- have dropped dramatically for black Americans. And research data indicates that women who grow up in poor families and who perceive a lack of economic opportunity are more likely to settle for having children outside of marriage.

Compared to married mothers, single mothers make significantly less money. Using data from the 2012 Current Population Survey, Mathur calculated the income disparity between married and single women:

  • The difference for married or single women without children was $857.
  • However, for married and single mothers, the difference was $19,900.

It is difficult for single mothers to generate more wealth because they tend to have low levels of education. Their resulting low incomes must cover standard living expenses in addition to their children's health care and education expenses, leaving little additional money for savings.

Mathur says that education is key to economic advancement, encouraging women to complete their educations, whether attending college or a technical school. She also suggests expanding the Earned Income Tax Credit and reforming the child care tax credit.

Mathur cautions, however, against, government-mandated paid maternity leave. If businesses are forced to pay their employees while they are on leave, many employers will be hesitant to hire women in the first place.

Source: "How does single motherhood affect wealth?" American Enterprise Institute, August 5, 2014. 

 

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