Do welfare programs have a marriage penalty?
New research explores link between family formation and eligibility for social welfare programs
While marriage and household formation is generally perceived as having a positive effect on the U.S. economy, marriage may put some middle-class couples at an economic disadvantage.
A recent report published by the American Enterprise Institute examined the link between eligibility for social welfare programs and income limitations that arise when lower- and middle-income couples wed.
The report explains that when two people who may independently be eligible to receive social benefits – like Medicaid – marry, their joint income may render them ineligible for the program as a couple.
The biggest burden falls on families with incomes between $40,000 and $50,000, who are more likely to no longer qualify for the programs when married.
“The evidence suggests that now, the greater burden of marriage penalties falls on couples whose income is between 100 percent and 250 percent of the poverty line—that is, working-class Americans who have already seen the greatest erosion in marriage of any group in the nation in the last three decades,” researcher Brad Wilcox wrote.
The marriage penalty can exceed 30 percent of income for some couples, the research states, while 40 percent of cohabitating couples may face impediments to marriage through penalties in programs like SNAP and Medicaid.
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The report concludes that federal agencies should look into ways to reduce marriage penalties for working-class families, including potentially raising the income threshold for married couples.
Marriage rates hit an all-time low in 2018, according to data from the National Center for Health Statistics, falling to 6.5 marriages per 1,000 people. A decline in the marriage rate, however, has been observed since the 1980s.
Rates have shown a particular decline among minorities and those in middle and lower economic quintiles.
As previously reported by FOX Business there are a number of financial benefits couples can enjoy if they tie the knot – including federal tax and retirement benefits.
Overall, marriage has been linked to higher economic growth and economic mobility within states.