Cohabiting Couple, Filing Jointly? Resource Pooling and U.S. Poverty Policies
Social policy in the United States is inconsistent in its treatment of cohabiting-parent households. For example, although welfare policy generally assumes that marital status should not affect the extent to which children benefit from each adult's income, tax policy and the poverty classification assume income pooling among married but not cohabiting parents. Neither assumption has been adequately tested against actual household economic behavior. I use data on couples' money management and expense division from the Fragile Families and Child Wellbeing Study to examine household availability of cohabiting fathers' income. Although their mechanisms for combining income differ, the results suggest that cohabiting parents do generally pool resources, so the income of both parents should be considered in setting family policy.