In the analysis of socioeconomic affairs of the United States, the value of family structure is perhaps too sensitive and close to home for many pundits and policy researchers to bring up.
Wendy Wang and W. Bradford Wilcox of the American Enterprise Institute and the Institute for Family Studies show no such fear. Their policy report, "The Millennial Success Sequence" (PDF), details how education, marriage, and children — in the right order — are strongly linked to the financial well-being of millennials.
In essence, the "success sequence" consists of three key, middle-class norms that tend to lead to solid financial outcomes:
- graduating from high school;
- maintaining a full-time job or having a partner who does;
- having children while married as opposed to having them outside of marriage.
While broad in its characteristics, the success sequence provides a general understanding of the necessary ingredients for a sustainable family structure.
Raising a family and creating a stable environment for posterity are very delicate matters that require meticulous planning and sacrifice. Despite clear evidence pointing to the importance of following this sequence to the letter, millennials have not heeded this proven success template. For example, according to a new analysis of Bureau of Labor Statistics data, a record 55 percent of millennial parents (ages 28-34) have put childbearing before marriage.
In short, Wang and Wilcox demonstrate that the most financially successful young adults are those that put marriage before childbearing. This study also notes that 86 percent of young people who married before having children are among the middle or top third of earners. On the other hand, 53 percent who put the baby carriage first have incomes in the middle or top third. The remaining 47 percent of millennials who have a baby first would fall in the lower rung of the income ladder.
These trends are even more revealing when looking at different demographic groups. Among Caucasians, 54 percent of those that opted to have a child first find themselves in the middle or upper third of the income distribution, versus 87 percent of those who waited. Among African Americans, those rates are 39 percent versus 76 percent; so those who postpone children have just shy of double the likelihood of relative prosperity.
All in all, Wang and Wilcox’s "The Millenial Success Sequence" does an excellent job of bringing in statistical evidence to demonstrate the power of the success sequence in determining the financial welfare of millennials. For the sake of providing proactive solutions that strike at the very root of this problem, this piece would have benefited from proposing the elimination of certain government programs that incentivize these types of sub-optimal behaviors.
In politics, there should be no sacred cows when it comes to programs and departments that should be axed. More studies concerning specific policies that incentivize poor family planning are necessary to further understand this growing problem in America.
That being said, "The Millenial Success Sequence" is a much-needed conversation starter on a topic that is simply not discussed enough in the public-policy sphere. It would behoove economists and demographers to read he report to truly grasp the importance of the success sequence and why policymakers should take it more seriously.