The Economic Mobility Project, an initiative of the Pew Charitable Trusts, recently released a report on the impact of a family’s structure on a child’s absolute and relative economic mobility. Family structure is believed to be an important factor in a child’s economic future because this structure typically indicates the amount of human capital investments-the time and money that parents spend on or with their children. The greater the investment, the higher the likelihood the child will succeed in the labor market as an adult.

Absolute mobility is defined as the proportion of children who earn a family income that is higher than that of their parents. Relative mobility is the change of position in the income distribution in relation to their parent’s position in the income distribution. A child can be upwardly mobile in absolute terms but not in relative terms.

The overall findings:

• Family structure (in this study, family structure means a child whose mother was always married, was divorced or widowed, or was single at the time of the child’s birth) does in fact influence future economic mobility.
• Divorce has a harmful impact on economic mobility. Children from divorced families have lower relative and absolute mobility.
• African American children are less likely to experience upward mobility than white children. The study recognizes that family structure is not the only factor that impacts African American children and their future economic mobility.

While the study offers no clear evidence on why marital status matters or has the impact it has, it speculates that “one might imagine that marital status matters because parents who are married tend to earn higher and total family incomes than single parents (mostly mother-headed) household.  Married couples also may provide more supervision as well as more support….On average, a married couple has more money and time to invest in their child, which should…increase the skills of the child that are valued in the labor market…A second reason that family structure may matter is that the disruption of divorce has been found to have detrimental effects on children.”

The study goes  on to note that with family structure having such an impact on a child’s relative and absolute economic mobility, certain policies can be used to improve a future economic mobility. Examples might include increased subsidies to working single parents (such as increased earned income tax credit (EITC) refunds) and removing marriage penalties in the tax system.

To read the full study, visit the Economic Mobility Project’s website.