Gen-X and Gen-Y, the generations following the Baby Boomers, are raising their own children today. As they do so, they face a more difficult financial reality than the Baby Boomers. The reasons for this include longer periods in school, the declining value of higher education, higher home prices and a changing economy.
However, in assessing the financial struggles of raising a family in this generation, one factor must not be overlooked. This is changing family norms: Cohabitation instead of marriage and higher rates of family breakdown. Some, like the author of Marriage and Caste in America, Kay Hymowitz, refer to this as the absence of a “life script.”
It is not enough to merely agree that the post-Baby Boom generations are stretched; we must consider why this is the case. Financial insecurity is not always simply about a lack of money. If we fail to address family breakdown, no amount of financial transfers will alleviate the problems of familial—often leading to financial—instability.
Public policy should allow Gen-X and Gen-Y to be more self-sufficient as they raise their families, needing neither to rely on funds from family, nor on government largesse.
In light of these realities, we recommend that:
- The federal government should offer family taxation, also known as income splitting, to all families with children. This reduces a family’s tax burden. Currently such income sharing is only allowed for retirees who receive pension income from the government
- Parents with children need to keep more money in their own pockets. Income splitting between spouses lowers the family tax bill
- Families with young children would be better supported by lowering taxes than some currently are through childcare benefits
- Communities, families and schools should work to restore the life script which puts love, marriage and children in the best order for life-long family stability
- Schools, secondary and post-secondary, should teach the social science research showing there is a difference in outcomes between marriage and cohabitation
- Based on the social science research of outcomes of marriage versus cohabitation, families, churches and broader communities should encourage children to see lifelong marriage as realistic and attainable
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