Want to Help the US Economy? Get Hitched
Declining marriage rates may be harming the U.S. economy , according to a report by brokerage firm ConvergEx, which draws a correlation between fewer couples tying the knot and falling personal income growth.
In a report on Monday, ConvergEx said personal income growth in the U.S. stood at 2.9 percent per year in 2010, under half the 50-year average of 5.9 percent.
The report's authors Nicholas Colas, Beth Reed and Sarah Millar noted marriage rates among the general population have fallen sharply during the same time period, with only 56 percent of American adults currently married, versus 72 percent in 1970.
As a result, fewer men are benefiting from the "marriage wage premium" — the term coined by labor economists to describe the phenomenon whereby married men earn between 10 and 50 percent more than those who are single (the same does not apply for women). Economists disagree as to the reasons why, but some suggest marriage results in lifestyle changes that require greater consumer spending , leading men to develop a stronger work ethic and hence earn more.
"Using the argument that married men work harder because they have an obligation to support their family, then single men have less of an incentive to work hard since perhaps their biggest financial obligation is rent for an apartment, " the ConvergEx authors wrote.
They warned that a continued fall in marriage rates could hamper the U.S.'s ability to rejuvenate its economy .
"Marriage is an income-boosting measure. Less of it translates into weaker personal income growth, and consumer spending could take a (potentially long-term, structural) hit, " the authors said.
In addition, both male and female participation in the labor force is at record lows, with only 57.6 percent of women working and 70.1 percent of men. (Read More: One Billion Women to Enter Workplace in Next Decade )
The report warned: "Whatever the cause, the combination of fewer people of both sexes working and fewer dual-income households doesn't bode well for the economy."