Household economies: Money management and resource allocation among married and cohabiting parents

This dissertation focuses on the economic relationship of the couple in a family form that has been growing in the United States in recent years—cohabiting-parent families. The data come from the Fragile Families and Child Wellbeing Study, a twenty-city study of unmarried parents and their children that includes a sub-sample of married parents. I examine three aspects of the household economic behavior of cohabiting-parent families in comparison to married-parent families: whether couples put their money together in joint or “common pot” money management systems; how couples who keep their money separate divide expenses for the household and child; and whether cohabiting-parent households experience higher levels of material hardship than married-parent households at a given income level. I draw on sociological and economic theories of the household to examine the causes and consequences of differences in the household economic behavior of married and cohabiting parents.; The results show that couples' money management is strongly related to marital status: cohabiting mothers are less likely than married mothers to say they and their partners put all their money together, even when controlling for differences in the age, education, race and ethnicity, employment, and relationship duration. Nevertheless, given the results of prior studies suggesting that cohabitors strongly favor financial independence, a striking finding of this research is that half of cohabiting mothers say they and their partner put all their money together. I also find that cohabiting couples are more likely than married parents to split expenses for the household and child 50–50, rather than having the father pay more for both kinds of expenses. Couples' money management systems and division of expenses are also related to the gender division of labor in the household, past relationship-specific investments, couple conflict, and race and ethnicity. Finally, I find that among non-Hispanic white mothers, but not among African American or Hispanic mothers, there is more material hardship in cohabiting-parent than in married-parent households. I explore the implications of these findings for U.S. social policies, including welfare and tax policy and poverty measurement.