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Broken Families, Broken Economy

The real obstacle to growth

Jul 4, 2011, Vol. 16, No. 40 • By MITCH PEARLSTEIN
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Like a good academic, Scafidi felt compelled to be methodologically cautious; perhaps overly so. But the rest of us are free to observe that the actual cost is considerably above $112 billion a year. 

A second way of estimating costs is to figure out how much lower the poverty level would be if out-of-wedlock birth rates and divorce rates were lower. In 2009, Brookings scholars Ron Haskins and Isabel Sawhill wrote that if the “United States had the same proportion of children living in single-parent families as in 1970, all else equal, today’s poverty rate would be roughly one-quarter lower than it is.” Even more dramatically, Sawhill and another colleague earlier wrote that if family structure had not changed between 1960 and 1998, the poverty rate for black children in the latter year would have been 28.4 percent instead of 45.6 percent. 

A third approach reflects the work of several econometricians on the connections between academic achievement and economic growth. In several invaluable studies, economist Eric Hanushek demonstrated the vital importance of a nation’s competence in mathematics and science for its economic success. The quality of learning in these two subjects​—​which is significantly depressed by family fragmentation​—​is best measured by standardized tests that have been administered internationally since the 1970s. 

“There is now considerable evidence,” Hanushek wrote, “that cognitive skills measured by test scores are directly related to individual earnings, productivity, and economic growth. A variety of researchers document that the earnings advantages to higher achievement on standardized tests are quite substantial.” But if the relationship between cognitive skills and individual productivity and incomes is strong, the relationship between labor force quality and economic growth for nations as a whole is perhaps even stronger. A more skilled society may generate more invention, enable companies to introduce improved production methods, and lead to faster introduction of new technologies. And while these patterns hold for developed and developing nations alike, Hanushek wrote, enhanced cognitive skills have their “greatest positive economic impact” in nations with the most open economies​—​like the United States. 

Here it is natural to wonder why the U.S. economy remains dominant when our students do so poorly in math and science. Hanushek noted that many factors determine a nation’s economic vitality. In our case, the openness and fluidity of markets, including a comparative lack of governmental intrusion, may be decisive. But in a 2002 essay, Hanushek warned that a day of reckoning was approaching. The expansion of education in the United States, he argued, outpaced that of the rest of the world in the 20th century. We opened secondary schools to all our citizens and enlarged higher education by further developing land-grant universities, adopting the GI Bill, and funding grants and loans to students. The U.S. labor force came to be better educated​—​despite the lesser achievement of our high school graduates​—​than that of most other countries. In other words, Hanushek argued that “more schooling with less learning each year” had yielded more human capital than found in nations with fewer years of schooling but more learning in each of those years. That approach, however, “appears on the verge of reaching its limits.” 

Even if it is not possible to calculate the precise degree to which educational shortcomings burden our economy, the sequence is inexorable: Family breakdown weakens educational performance, which in turn weakens economic performance.

Now, it might still be the case that the U.S. economy has enough going for it that high family fragmentation is not yet drastically damaging. But we can already observe the fallout in individual cases, as men and women who grew up in fractured families and performed poorly at school simply lack the tools to succeed in an economy that continues to demand strong cognitive and other skills​—​with similarly constrained fates awaiting disproportionate numbers of their own children and grandchildren. 

What might this portend for our social and political fabric? Clearly nothing good, as family breakdown can only deepen social cleavages in un-American ways. It’s hard to ignore the fact that from 1980 to 2005, according to one calculation, more than 80 percent of the increase in Americans’ income was enjoyed by the top 1 percent of earners. Meanwhile, there is now less upward mobility in the United States than in countries like Canada, France, and Germany. Recent data have led Sawhill, the Brookings scholar and former Clinton administration economist, to underline three core points: Income in the United States is less equally distributed than it was several decades ago; income is more closely correlated with education; and it’s more closely correlated with family structure. 

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