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Tuesday, September 17, 2013

Where is the market failure in marriage?

In honor of National Unmarried and Single Americans Week, I’m going to pose a question that may be somewhat controversial: Is there an economic rationale for government incentives to get married? By ‘government incentives to get married’, I’m talking about all the ways in which the government (and society in general) privileges married people. Of course, this is something that the gay community has been yelling about for a long time but I think many straight people don’t really, fully grasp the extent of the issue.* One widely-cited statistic is that there are over 1000 benefits, rights and protections in Federal laws that are based on marital status. Some of these benefits can still be obtained by the unmarried, with additional work (e.g., I can manually change the beneficiary for my retirement accounts or sign an advanced health directive so my partner can make medical decisions for me) but many are simply not available to unmarried people, period. It’s no wonder that single-sex couples are so eager to gain access to legal marriage (completely aside from the social acceptance aspect, of course).

But to me, the bigger question is: why should people have to get married to get these benefits in the first place? Is there any economic rationale for government policies that confer benefits on the married? In my Principles course, I teach my students that government intervention may be warranted in situations of market failure; that is, where the market outcome may be inefficient, such as when there are externalities, asymmetric information, natural monopolies, public goods or common resources. Alternatively, the government may want to intervene in some scenarios where the market outcome seems inequitable. But do either of these apply to marriage today?

Many of the pro-marriage laws on the books today were actually adopted decades ago, when the marriage market looked very different. In the 1950’s, few women worked so I can imagine that policies to encourage marriage and protect housewives could have been justified on equity grounds (i.e., marriage was a way for women to avoid poverty). But that obviously doesn’t make sense today. From an efficiency standpoint, the only argument I can think of must involve externalities somehow. That is, people other than a particular couple presumably benefit somehow from that couple being married. I guess the conservative argument is that married couples are more “stable” and better behaved (?) and this is therefore better for society than if those people were running around just cohabitating or being single. I don’t know that there is really much evidence of this – a quick Google search turned up lots of rhetoric along the lines of ‘family values’, and studies about how marriage benefits the people IN the marriage (though the psychologist Bella DePaulo has also written a lot about how those studies often don’t actually show causality), but I couldn’t find much showing that marriage, per se, has positive externalities, such as causing people to act any better (for society) than before they were married. The closest I could find was arguments about the impact on children (i.e., kids do better when their parents stay together) but if that’s the basis for government incentives, then all the benefits should only go to couples with kids, not just anybody who is married.

Although I can’t think of a good argument for marriage benefit policies based on the standard idea of economic efficiency (i.e., the market ‘underprovides’ marriage so the government needs to provide incentives to boost consumption/production), I can imagine an argument based on administrative efficiency – i.e., some policies were probably adopted simply to reduce paperwork (e.g., most people would name their spouse as their beneficiary/spokesperson in most situations anyway so making that the default saves time and effort), or because “legal spouse” seems like an easy shortcut to identify “Very Important Person in my life”. But given that 46 percent of American households are now maintained by unmarried men or women (including 6.7 million specifically ‘unmarried-partner’ households), and the increasing trend in the percentage of couples choosing cohabitation over marriage, it seems like perhaps we should starting questioning whether marriage as the ‘default’ is really the most efficient way to go…

* Full disclosure: I am in a committed lifetime relationship but with no plans to get married because my partner is a relatively staunch Libertarian who doesn't think the government should be involved in the marriage game (for people of any sexual orientation). Because of this, I've been learning a lot about the things people have to do to work around policies that privilege the legally married.


  1. Very compelling post . . .

    This reflection is permeated with examples of how the government directly or indirectly categorizes persons who bond under, well, a religious-based construct. "Marriage" has slipped through the cracks of the first amendment . . .

    1. With respect, I believe the author and commenter misunderstand, or possibly ignore, the purpose of marriage. The purpose of marriage is to bond spiritually. Historically and practically marriage has always been a religious phenomenon with societal/political consequences.

      Now, please forgive the digression from Economics here.

      Theocratic governments are much more likely to be monarchial and marriage as a government function is much more important when a country has a theocratic system of government. The power derived from God is manifested religiously through the "two flesh (specifically, man and wife) becoming as one." This means that the bond is more than just a registry in a government dossier, but an actual spiritual union between two people. Even more importantly, this forms the basis of any "house" in the noble sense, and is the basis of government. Basically, marriage brought political power to families. Because of divine right, it had been determined that familial relations (marriage), must be sanctified by God (under a priest of Peter's lineage) and therefore the marriage, and the power brought with it, was actually sanctioned by God Himself.

      Although our government is a Republic and not a monarchy the historical tradition is still a household with a heritable lineage and leadership (not necessarily patriarchal). The original constitution outlined a system of voting by household, with only male land owners capable of voting. This was not a system necessarily designed to keep certain groups (I'm not sure people were classified as 'groups' at this time) down, but it was a system deemed to be preferred by our founders who were very much religious. The founders had destroyed the monarchy, yet maintained the nobility to an extent. In the noble system it would be highly beneficial to use government policy to necessitate marriage.

      Progressive theory moves us further away from our roots towards a secular and democratic system where the idea of a household voting in unison seems archaic. It should be predictable that as Americans become less concerned with preserving tradition that marriage would cease to be a sought after as a desirable state of being.

      The question then becomes, is marriage a desirable state of being? Without God to sanctify marriage, and a theocratic government to require it, the answer seems to be no. Indeed, if there are no spiritual incentives to be married, would anyone become married? If no one is married, then government incentives would inevitably cease, and therefore our society would become, with a little stretch of the author's logic, a government managed system of incentives and disincentives controlling procreation.


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