I was intrigued by a piece in Saturday’s New York Times about academic “power couple” Betsey Stevenson and Justin Wolfers – economists, partners & parents of a 2-1/2 year-old, who have been collaborating on research into the economics of family life. Or, as the Times calls it, “Lovenomics.”
(Sidebar: I actually heard these two speak a few months ago on the Freakonomics podcast, in an episode called “The Economist’s Guide to Parenting” which was recommended to me by a friend during my third trimester of pregnancy. Both thought-provoking and a barrel of laughs, I highly recommend it. Stevenson and Wolfers are both whip-smart and highly entertaining, whether you agree with their analysis or not.)
There’s a quick guide to the “Basic Principles of Lovenomics 101″ here, which gives some advice (based on the couple’s economic research) that might surprise some. (The four principles: “Don’t marry. Work alike. Outsource. Have children.”) The bit that particularly caught my eye was this:
Mr. Wolfers and Ms. Stevenson aren’t married. Why? Taxes, mostly. Ms. Stevenson says the tax code essentially creates “a subsidy for affluent husbands” by treating a working couple’s dual income just as it treats the same amount of income earned by a working married person whose spouse stays home. That makes working relatively expensive for women, particularly those with children. A married working couple often pays for child care and, if they’re relatively affluent, they may also buy many meals out and hire a house cleaner. Such expenses effectively lower their income. Their tax rate, however, remains unchanged. “It’s a system that tries to convince women to stay out of the labor force,” Ms. Stevenson said. Mr. Wolfers and Ms. Stevenson, who have a young daughter, have consulted a lawyer so that they have legal rights similar to those of married couples, like power of attorney. (Emphasis mine.)
Tax laws are different here in Canada (where common-law couples have the same rights and responsibilities as married ones), but I hope our American readers will find this helpful – and spread the word. This feels to me like a critical piece of information & it’s the first I’ve heard of it.
Of course, this doesn’t mean there are no good reasons to marry – ranging from smoothing out immigration processes to less rational motivations like romance – but if Stevenson’s assertion is true (and I have to believe she knows what she’s talking about, given she used to be the chief economist at the U.S. Labor Department), it has massive ramifications for women in the U.S.. In short, if you’re planning to have kids – or simply prefer to pay others to take care of the usually-unpaid work that women shoulder disproportionately, whether it’s meal preparation, housecleaning, or elder care – don’t get married.
Perhaps a bit of an ironic admonition on Valentine’s Day, but when it comes to women’s financial well-being, I don’t have a lot of time for hearts & flowers – I’d rather have the cash in pocket, thanks.
(And hey, this doesn’t mean you can’t still throw a big party if you’re so inclined. Just skip the whole official registration part, which you have to admit is the least fun bit anyway.)