Effects of Cohabitation on Financial Stability

1. Income

Cohabiting men have, on average, less stable employment histories than single and married men.1) Cohabiting fathers are less likely to have consistent, full-time work than are married fathers, and are less likely to work long hours. Half as many (16 percent) cohabiting fathers worked 45 hours or more per week in 1997, compared to married fathers (32 percent).2)

Cohabiting households have higher incomes than single-parent households but lower incomes than married-parent households.3) In 2004, over 60 percent of cohabiting U.S. working men earned less than $25,000 annually, and only 6 percent earned at least $50,000.4) The median income among U.S. men that year was $40,700.5)

Mothers who cohabit have lower incomes than mothers in a stepfamily who are married to a man other than the father of their children,6) but cohabiting unmarried women work more hours as their partner’s income increases.7) Furthermore, cohabiting couples in the United States are 3.6 times more likely to keep separate bank accounts than married couples are.8)

During the late 1980s and early 1990s, positive economic circumstances for men tended to decrease a cohabiting couple’s odds of separating and accelerate their marriage. Greater earnings for a man increased the likelihood he and his cohabiting partner would marry.9)

2. Net Worth

Older cohabiters who have never been married have, on average, 78 percent less net worth than those in intact families. Cohabiters who have been divorced once or widowed once have 68 percent less net worth than intact families.10) Cohabiters have the lowest net worth growth of all family structures; their net worth growth is comparable to that of widows and widowers.11)

3. Poverty

Poverty rates are significantly higher among cohabiting families than among married families. Analysis of the 1997 and 1999 waves of the National Survey of America’s Families showed that the poverty rates of cohabiting parents were 7.5-15.4 percentage points higher than those of married, two-parent families.12) The rate of poverty was 12.7-23.8 percent higher for single-parent families with another adult present than for married-parent families.13)

4. Impact on Children

Children in cohabiting families enjoy a higher economic status than children in single-parent families, but less than children in married families.14) Following a divorce, poverty is decreased by 40 percent among children whose mothers cohabit, though 29 percent of children whose mothers cohabit after divorce remain impoverished.15) Nearly 25 percent of children in cohabiting households receive public assistance (compared to less than 5 percent of children in married-parent households).16)

Marin Clarkberg, “The Price of Partnering: The Role of Economic Well-Being in Young Adults' First Union Experiences,” Social Forces 77, no. 3 (1999): 962.
B.V. Brown, “The Single-Father Family: Demographic, Economic, and Public Transfer Use Characteristics,” Marriage and Family Review 29, (2000): 203-220.
Adam Thomas and Isabel Sawhill, “For Love and Money? The Impact of Family Structure on Family Income,” The Future of Children 15, no. 2 (2005): 68.
Anastasia R. Snyder and Diane K. McLaughlin, “Economic Well-being and Cohabitation: Another Nonmetro Disadvantage?” Journal of Family and Economic Issues 27, no. 3 (2006): 570.
J.B. Brown and Daniel T. Lichter, “Poverty, Welfare, and the Livelihood Strategies of Nonmetropolitan Single Mothers,” Rural Sociology 69, (2004): 282-301.
Daniel H. Weinberg, Evidence From Census 2000 About Earnings by Detailed Occupation for Men and Women: Census 2000 Special Reports (Washington, D.C.: Bureau of the Census, 2004).
Elizabeth Thomson, Thomas Hanson, and Sara McLanahan, “Family Structure and Child Wellbeing: Economic Resources vs. Parental Behaviors,” Social Forces 73, no. 1 (1994): 227.
Lorien C. Abroms and Frances K. Goldscheider, “More Work for Mother: How Spouses, Cohabiting Partners and Relatives Affect the Hours Mothers Work,” Journal of Family and Economic Issues 23, no. 2 (2002): 159.
Kristen R. Heimdal and Sharon K. Houseknecht, “Cohabiting and Married Couples’ Income Organization: Approaches in Sweden and the United States,” Journal of Marriage and Family 65, no. 3 (2003): 534.
P.J. Smock and W.D. Manning, “Cohabiting Partners’ Economic Circumstances and Marriage,” Demography 34, (1997): 336
Janet Wilmoth and Gregor Koso, “Does Marital History Matter? Marital Status and Wealth Outcomes among Preretirement Adults,” Journal of Marriage and Family 64, (2002): 261.
Julie Zissimopoulos, “Gain and Loss: Marriage and Wealth Changes over Time,” Michigan Retirement Research Center, Working Paper (2009): 9.
12) , 13)
Robert I. Lerman, “Impacts of Marital Status and Parental Presence on the Material Hardship of Families with Children,” Urban Institute (2002): 14.
Adam Thomas and Isabel Sawhill, “For Love and Money? The Impact of Family Structure on Family Income,” The Future of Children 15, no. 2, (2005): 68.
Donna R. Morrison and Amy Ritualo, “Routes to Children’s Economic Recovery after Divorce: Are Cohabitation and Remarriage Equivalent?” American Sociological Review 65, (2000): 570.
Peter D. Brandon and Larry Bumpass, “Children’s Living Arrangements, Coresidence of Unmarried Fathers, and Welfare Receipt,” Journal of Family Issues 22, (2001): 3-26.
Wendy D. Manning and Daniel T. Lichter, “Parental Cohabitation and Children's Economic Well-Being,” Journal of Marriage and the Family 58, (1996): 998-1010.

This entry draws heavily from Marriage and Economic Well Being: The Economy Rises or Falls with Marriage.