The State as Marriage Partner of Last Resort: A Labor Market Approach to Single Motherhood in the United States, 1960-1980

Abstract

This paper develops a labor-market orientated expected utility model to explain the massively high level of non-marital fertility, especially teenage single motherhood in the United States in the period 1960-1980. Labor market regulations reduce, via disemployment, male youth income-earning capacity and thus reduce expected female opportunities on the marriage market. The mandated minimum wage rates together with increased minimum wage coverage are shown to increase non-participation and unemployment among male youths. This produces the high supply of unmarried teenage females who meet the demand for single motherhood generated by restrictive welfare benefits. Male youth joblessness and low incomes increase the relative value of welfare benefits as an alternative female income. The above combination of youth labor market restrictions and the restrictive welfare system with its high regional differentials leads to a failure of the marriage market and to an explosion of out-of-wedlock fertility. The addition of a new preface updates the literature by more than 25 years since the original paper was written and shows the relevance to contemporary debates over welfare reform in Australia, typically a follower-country with respect to welfare policy.

Keywords: single-motherhood, labor-market, teenage women, joblessness, minimum-wage

JEL Classification: I38, J31, J38, J48, H23