What Does a Broken Home Cost a Child? $61,600, Study Finds

What Does a Broken Home Cost a Child? $61,600, Study Finds

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Sign up By , CP Reporter | Aug 23, 2018 9:20 AM

A new study examining family structures reveals that children from broken families accumulate approximately $61,600 less wealth on average over the course of their lifetimes than those who were raised in an intact family.

The , “Childhood Family Structure and the Accumulation of Wealth Across the Life Course,” aimed to explain how family structure is related to wealth accumulation, and was published earlier this month in the Journal of Marriage and Family.

Researchers found a median wealth penalty of at least $61,600 at ages 47 to 55 is for individuals who did not live continuously with both biological parents from birth to age 18, depending on their alternative family structure.

Study authors Fabrizio Bernardi of European University Institute in Italy, Diederik Boertien of Centre d‘Estudis DemogrĂ fics, and Koen Geven of the World Bank noted that it is well documented that the structure of ones family during childhood is connected to several outcomes later in life, such as educational attainment, income, partnering behavior, and psychological well-being. But the subject of wealth is underresearched in this context, they explained.

Using data from the 1979 National Longitudinal Survey of Youth, the researchers analyzed a representative set of adolescents since they were aged 14 to 22 years, examining relevant family dynamics, intergenerational wealth transfers, and several other factors tied to wealth building over time. By the year 2012, the last wave included, the participants were between 47 and 56 years old.

The nine types of family structures examined were those where children lived with both parents throughout childhood; permanent moving-out of parent, no stepparent ever; permanent moving-out of parent, stepparent ever; born to single parent, no stepparent ever; born to single parent, stepparent ever; never lived with biological parents; parent died before age 18; biological parent moved out and back in; and biological parent moved in after birth.

“For children who experienced the permanent departure of a parent from the household, we observed a median wealth penalty of $61,600 if a stepparent ever moved in, and of $66,600 if they never lived with a stepparent,” the researchers explained.

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“A wealth penalty was also observed for individuals who grew up in a stable, single-parent family.”

Compared to intact families, alternative childhood family structures that involved parental death, temporary separations, and the experience of stepparenthood showed statistically significant differences in wealth.

The article cites the vast body of social science research that shows that children who continuously lived with both biological parents throughout their childhood tend to have more cognitive and noncognitive skills when compared with children who did not.

“Cognitive ability, noncognitive skills, and educational credentials can thus affect wealth accumulation through their effects on labor market earnings. They can also affect the accumulation of wealth more directly through the management of economic resources because consumption patterns, saving rates, and investments are likely to differ according to skill levels.”</p

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