Women's Economic Risk and the Economic Position of Single Mothers

The poor economic position of single-mother households is a result of three factors: women's generally lower wages, lower economic support from men, and a relatively great need for income. This paper examines the relative importance of the last two of these factors. Data from the Luxembourg Income Study show that single-mother households in West Germany and the United States have high rates of poverty while their situation in Sweden is considerably better. The remainder of the analysis concentrates on the economic risks which would be faced by married parents if they were to separate tomorrow, and on the insurance transfer incomes provide against such risks. It is shown, first, that the costs of breaking one household into two are considerable, and that single-mother households will be worse off economically, unless a substantial increase in family income takes place. Second, that the economic dependence of married mothers places many in a ‘high risk’ situation, where they will lose a high proportion of their economic resources if the support from a spouse disappears. Finally, the analysis shows that transfer income respresents a poor insurance against the risk resulting from women's economic dependence.