Dynamics of Family Economic Wellbeing and Composition of Household Income Around a Birth

Background: Families’ economic wellbeing may decline in the time around a birth as demands on resources rise, and mothers’ earnings often fall. The composition of household income may also change. Women’s share of household income likely drops, and there are reasons to expect reliance on other sources such as public programs and other household adults’ earnings will also fluctuate around a birth. Existing evidence of how family economic security and composition of household income change in the time around a birth is surprisingly limited, despite the importance of this information for improving practice and policy interventions to increase women and families’ wellbeing during this critical period.

This study contributes to filling these knowledge gaps. Specifically, I address the following research questions: 1) How does overall family economic wellbeing change, month-to-month, in the year leading up to and following birth? 2) How does the composition of household income – share of mother’s earnings, father’s earnings, other household adults’ earnings, public program income, child support and other income – change, over the same period? Because financial circumstances around a birth likely differ for more- and less-advantaged families, I estimate results at the population level and by mother’s education and household structure.   

Methods: I use monthly, longitudinal, nationally-representative data covering 1995-2013 from the Survey of Income and Program Participation. The study sample includes all households with a birth (N = 11,615). I construct a household-birth-month level file including monthly observations in the year before and after the birth. Outcome variables include: three measures of family economic wellbeing (percent of federal poverty level (FPL), percent of FPL including income from near-cash public programs, and gross household income); as well as each income source as a share of gross household income. I use log dependent variable models to estimate the mean monthly percent change in each outcome relative to pre-pregnancy (one year pre-birth).

Results: Family economic wellbeing declines significantly in the months around a birth. On average, family income as a percent of the FPL begins to fall in late pregnancy, reaches a low of 35.2% below the pre-pregnancy level in the first month of the infant’s life, and does not recover fully in the year post-birth. Declines in other measures of economic wellbeing are also significant, but smaller in magnitude. Subgroup analyses show few differences in percent change in economic wellbeing by mothers’ education, but significantly larger declines among single mothers who live alone. In terms of composition of household income, reliance on father’s earnings and public programs increases on average after birth, while contributions from mother’s earnings and other household adults fall. Among less-advantaged families, public programs and other adults’ earnings make up a larger share of income and are more responsive to birth, and mother’s earnings fall earlier in pregnancy.  

Conclusions:  Results suggest families experience significant declines in overall economic wellbeing and important changes in composition of household income around childbirth. Implications for infant health, women’s economic security and equality, public benefit programs, and policies supporting mothers’ employment will be discussed.