In the modern world of consumer choice divorced from any moral grounding, family policy can seem hopelessly divisive. Some argue that "alternative family forms" are simply private lifestyle choices, comparable to our choices of curtains, cuisine, or music. The choice to have children inside or outside marriage is just another personal choice for each individual to make privately. But a recent report from the Institute for American Values shows that these seemingly private decisions can have serious, and expensive, costs for taxpayers. It estimates that the taxpayer costs of divorce and unwed childbearing amount to at least $112 billion each and every year--more than $1 trillion over a decade.
The premise of these calculations is that raising children outside of marriage increases the risk of significant harm to children, including academic, medical and psychological problems. Fatherless boys are at risk for juvenile delinquency and criminal behavior. Fatherless girls face elevated risks of early sexual activity, and all the associated problems: teen pregnancy, sexually transmitted diseases, psychological distress, and having children who end up in the child welfare system. To put it positively, marriage is a protective factor against this array of problems.
Some, though not all, of these problems are associated with poverty. Unmarried mothers are more likely to be poor, and poor people are more likely to have academic, medical and psychological problems. So the IAV researchers calculate the taxpayers' costs of divorce and unmarried childbearing by looking at the costs of anti-poverty programs, including Temporary Assistance for Needy Family, (TANF) Food Stamps, Housing Assistance, Medicaid, State Children's Health Insurance Program (SCHIP), Child Welfare programs, WIC, Head Start, School and the Lunch and Breakfast Program. They also take account of the costs to the criminal justice system.
They make the reasonable assumption that marriage could lift 60 percent of single mother households out of poverty. Then they calculate how much less the government would have to spend on a variety of specific anti-poverty programs at the state and federal level. That is how they came up with a total cost of $112 billion a year, which is roughly the gross domestic product of New Zealand.
Of these taxpayer costs, $70.1 billion are federal costs. To put this number in perspective, in 2007 the federal government spent roughly that amount ($72 billion) on the department of Veterans Affairs, and only slightly more ($88 billion) on the Department of Agriculture. The Department of Education spent slightly less at $68 billion. And the $70 billion cost of family fragmentation dwarves the Department of Homeland Security's 2007 expenditure of $50 billion.
Taxpayers pay an additional $33.3 billion at the state level, and $8.5 billion at the local level to address the problems caused by family breakdown. Not surprisingly, Californians faced the largest dollar costs of any state. This populous state that pioneered the sexual revolution now faces a budget deficit of around $12 billion. California's costs of family fragmentation amount to over a third of the state's deficit. Governor Arnold Schwarzenegger is proposing a $4.4 billion reduction in education spending, with 14,000 teachers getting pink slips. The Institute for American Values estimates that family fragmentation costs the state of California a minimum of $4.8 billion annually, virtually the equivalent of the budget cuts in education.
Some supporters of free markets and limited government are wary of expressing any policy preferences about the family. The idea that marriage should be the appropriate context in which to raise children seems to them an arbitrary imposition of a moral code on others. They applaud the efficiency of the free market, but they are reluctant to "privilege" marriage over other types of households as the expected context for child-rearing.
Other market supporters situate the market within a wider context of human liberty and dignity. The free economy is one aspect of an overall view of society that emphasizes the priority of culture over governments. These advocates hold that it is a mistaken application of consumer and market ideas to the family to believe that family form is nothing but a personal choice. Our private decisions can have significant costs to the people around us, including taxpayers.
Ever since I wrote Love and Economics, I have been trying to convince economists, libertarians, and fiscal conservatives that the family is a fiscal issue. Now that the Institute for American Values has documented this point by point, state by state, it will be much harder to avoid the conclusion that family issues are in fact, fiscal issues.