University Study Reveals Single Mothers Have More Debt Than Single Fathers

There is no denial of the fact that single mothers incur and have more debt than single fathers and this fact is further substantiated by recent studies conducted by several universities and money market experts. However, most people mix up between being in debt and running a family in poverty. These two are distinctively different aspects of finance though both are intertwined. If you do not manage your debt prudently, it is highly likely that you will face poverty in a very short time.

The facts and findings of the study show the different reasons why single mothers are carrying more debt than single fathers. These reasons that are well supported by relevant data can be summarized as:

The income level of the single mothers is significantly less than the single fathers
They are penalized for every additional child they have
Income of the single fathers either remains the same or increases with every child added in the family and
Men can make more out of every additional year invested in education.

All these reasons further widen the gender gap as per the reports of the new study.

Comparison of income disparity

The most noticeable and significant reason for incurring debt by any person is their income which is often less than their expenditures, no matter whatever is the reason. It is even more profound for single parents as they have only a single source of income and in most cases do not have any helping hand or a lending shoulder.

However, among the single parents, the mothers face more financial stress due to the disparity in income between them and the single fathers. This creates a chain reaction that leads to debts and poverty according to the debt consolidation reviews.

The study has come up with a comparison of this disparity in income between single mothers and fathers across three decades from 1990 to 2010 and the facts and findings were alarming.

Starting from the basics, there has been a remarkable increase in the potential of raising more children by the single parents. Along with it there has been a significant rise in societal needs. Both these factors have made its significant impact in the earnings of the single parents and their ability to support their family successfully to keep them above the poverty line.

The research suggests that there is a noticeable pay gap between the single fathers and mothers and it has been in force for the past three decades from 1990 to 2010. A national representative sample was created for this purpose based on human capital theory. The analysis revealed that the rate of single mothers falling into debt as well as below the poverty line is considerably higher than that of the single fathers.

A host of human capital, demographic, and work-related variables were considered and controlled to find that the contributing factor to this income disparity is primarily that single mothers are penalized more for having more children but the single fathers were not.

It was also found that the gender pay gap and gendered poverty have come down in the first two decades but since 2000, it stayed stable. Moreover, there was also an overall decrease in human capital that resulted in the decrease in the gender income and poverty gap but there is no significant implication that the gap is and will be reduced.

The in-work poverty factor

As compared to traditional families, the single parent families face a set of unique challenges when it comes to in-work poverty. This is because they do not have a second earner or a caregiver and therefore have to combat and compete with the dual-earner couples very hard in order to earn their positions in income distribution.

Add to that, they also have to face precarious employment terms as well as gender wage inequality all of which results in a high risk for the single-parent families experiencing poverty even when they have a stable income.
The study presents empirical evidence on such an in-work poverty factor which is primarily due to the inadequate wages.

The studies conducted with reference to the policy context of 18 OECD countries shows the impact of the family structure on occupation, paid parental leave, regulations of part-time work, and various other redistributive policies.

All these factors were carefully examined to distinguish three discrete patterns of performance in the approach of each country towards the in-work poverty in single parents. These are:

A balanced approach to ensure low inequality in the labor market collectively with redistribution
An unbalanced approach of battling in-work poverty through redistribution and
An approach towards high inequality existing in the labor market that is compensated with its redistributive policies but that too to a very limited extent.

Through studies, it was found that the countries that rely on the balanced approach to reduce inequality in the labor market seemed to fair better in a durable and substantial reduction of poverty among the single parents both with respect to gender and class when it is combined with a considerable level of redistribution.

The income factor

Single mothers earn much less than single fathers, and there are no two ways about it. Studies suggest that it is about two-thirds of the earnings of the single fathers even if the influencing factors such as occupation, education, number of hours worked, and social capital are considered to be the same.

The data reveals that the children lived with one parent live in poverty but remarkably the children living with single mothers lived below the poverty line as compared with the children that lived with single fathers.

One of the most significant ways in which single parents can come out of debt and poverty is by working full-time. According to the previous studies, most working single mothers reported of receiving unearned income that is assumed to be the child support.

Since the income gap does not decrease noticeably, single mothers tend to incur more debt and therefore are far more likely to live in poverty as compared to the single fathers.