Why family ties bind the nation

Divorce leaves women to look after children and creates a burden on the state when lonely people grow old. Paul Ormerod and Robert Rowthorn argue that people should be encouraged to marry for life

Dramatic shifts have taken place in family structures over the past 30 years. Marriage rates in Britain have fallen sharply, married couples are having fewer children, while the number of divorces and of children born outside marriage has increased dramatically.

Almost 70 per cent of dependent children still live in the traditional family with their married, natural parents, but this share is shrinking rapidly. Nearly 20 per cent now live with a lone parent, 9 per cent in step families, and 3 per cent with their unmarried natural parents. One third of children are born to unwed mothers.

These trends are of legitimate concern to the rest of society. Private decisions have public consequences. An action by an individual or group of people can affect, for better or for worse, others who are not party to that action. Economists summarise this concept in the single word "externalities". An obvious example is that of traffic congestion. The decision by someone to drive their car imposes costs on others, through the increased congestion and pollution which this causes.

In the same way, private decisions on family structures impose costs on the rest of society. And these externalities are considerable. The evidence is that, on average, children brought up in a stable, two-parent family do better than in other family types. This is true for almost every indicator used to measure their personal development. Family break-up often damages children, even when it makes one or both of their parents happier. In addition to the direct harm to children, the subsequent deviant behaviour of some of the victims creates serious costs for the rest of us.

Equally serious are the implications of modern family trends for the elderly. Stable families create a network of reciprocal obligation between generations, siblings and partners. This is the primary source of care in old age. According to the General Household Survey, 93 per cent of informal care for the old is provided by family, especially spouses and children. Friends and neighbours hardly figure.

The growth of lone-parent families, divorce and family reorganisation is creating many millions of people without close family ties. In the future these trends will impose a huge financial burden on the state, since many of those concerned will be unable to afford professional care as they age.

Against this background, we can see marriage as a powerful source of social stability. It is a supportive framework in which to raise children, and provides a natural care network for the elderly. Traditionally, it has also been an important way of socialising young men and offering them an avenue into responsible adulthood. The decline of marriage is creating an army of roving males, upon whom women cannot, and do not, expect to rely.

Whatever may be the shortcomings of marriage as an institution, it is the best we have. Issues of sexual morality are of secondary importance. The arrangements which people make in private behind the net curtains to maintain their marriage are not the concern of society. But the consequences of a breakdown of the institution of marriage are our concern.

To perform its functions properly, marriage must have both a special status and special responsibilities. People should be encouraged to get and to stay married. Unfortunately, many of the fiscal and legal changes we have adopted in Britain are serving to undermine this institution. Married couples, especially those with children, have lost out heavily from tax and benefit changes over the past 15 years. The main beneficiaries have been single people without children. But married couples have also been badly done by compared with lone parents. Until recently lone parents, however rich, received a special benefit not available to married couples. A married couple with two children in receipt of Family Credit was Pounds 4 to Pounds 9 a week worse off than a single person with the same number of children earning the same wage. In the last budget the child care allowance for many lone parents was raised to Pounds 100 a week, but extra taxes were levied on married parents. While lone parents are on average poorer than married parents, a large number of children living in poverty come from married families, and their plight is virtually ignored.

Legal reforms have reduced the incentive for commitment in marriage. In commercial life, partners embarking on a business venture make commitments to each other which are enforceable at law. If the other parties do not honour their side of the contract they can sue, either to enforce performance or for damages. This provides potential partners with the security they require to invest wealth and energies in a joint venture with others.

A market economy could not operate without this framework of justice. In the case of divorce, the financial settlement and the custody of children are decided without reference to responsibility. The deserted spouse has no more rights than a person who abandons their spouse for a new lover. George Bernard Shaw once predicted that the progressive modification of the marriage contract would be continued until it were no more onerous nor irrevocable than any ordinary deed of partnership. He was wrong. Legal changes have made the modern marriage contract much less binding than the average business deal.

These changes are usually presented as a move towards greater freedom. This is very misleading. When more liberal divorce laws were introduced in 1969 and 1996, these were imposed on everyone, including couples who had been married under the previous law and were happy with the arrangement. Their marriage contracts were rewritten by the state without any right of appeal. More generally, there is no provision for couples to choose a more binding contract than the standard, no-fault one that will soon come into force.

The main losers have been women. At all ages, it is mainly men who break their commitments, abandon their responsibilities, and leave women to cope with the consequences. It is essential for trust and social stability that some form of redress be restored to partners in the contract of marriage, and that the option of a more binding form of marriage should be available for couples who desire it. Britain should follow the example of Louisiana, which offers couples a choice of contract. They can choose either the old easy to dissolve, no-fault contract, or a more binding, fault-based "covenant" marriage.

More difficult divorce, restoration of the concepts of justice and responsibility in the marriage contract, and shifts in the tax and benefit structure towards married couples are all measures which would help reduce the costs which are imposed on others through private decisions. Like any insurance company, the state should encourage behaviour which reduces the likelihood or scale of such future costs. Insurance companies offer reduced premiums to customers who fit locks on their windows or who do not smoke. By the same logic, the state should encourage people to get married and stay married.

Such policy changes need not be large to have a potentially big impact. We can think of family structures as a complex system, arising from the actions of individuals whose behaviour is influenced directly by the behaviour of others. As we move through time, an individual can either stay in his or her previous situation, or move into a new situation, with probabilities determined not only by factors such as tax and benefits and the divorce law, but also by the behaviour of others. In other words, the more people who are or are not married, the more likely it is that any given individual will either stay in or convert to the married state in any given time.

Such systems are characterised by periods of relative stability punctuated by large and rapid changes. And these changes can be precipitated by relatively small events. We are not proposing a return to the tyrannical Victorian system as described by Friedrich Engels. Instead, a series of measures, each fairly minor, needs to be introduced to nudge the system of family structure back towards a "tipping point", where the popularity and stability of marriage becomes self-reinforcing.

Paul Ormerod is the chair of Post-Orthodox Economics. Robert Rowthorn is professor of economics at Cambridge University, and a fellow of King's College, Cambridge.