Family Structure and Inequalities in Parents' Financial Investments in Children

Objective This study examines family structure differences in parents' financial investments in children. Background Family structure in the United States is undergoing important change and continued stratification with increases in single parenting and cohabiting unions. These transformations in family demography have important implications for social mobility as theory and empirical research suggest family structure plays an important role in shaping children's life chances, in part through the differential financial investments that parents make for their children's development. Method Drawing from the 2003-2018 Consumer Expenditure Surveys, this study examined differences by family structure in parental financial investments in children's childcare, schooling, and enrichment activities using data on 44,930 households in 123,862 household-quarters. The study compared differences between married, cohabiting, and single parents, and it tested the extent to which disparities in economic resources account for associations between family structure and financial investments in children. Results Single and cohabiting parents made smaller financial investments in children than married parents. Income explained the entire difference for single parents but about 60% of the gap for cohabiting parents. These gaps in expenditures by family structure were smallest among Hispanic households and largest among highly educated households. Conclusion This study shows that family structure is a source of familial inequalities in parental investments in children. Explanations for the lower levels of investment (compared with married parents) are different between single and cohabiting parents, which has implications for how to reduce these inequalities.