The economic impact of same-sex marriage

Three countries legalised same-sex marriage in 2019, some citing its economic benefits.

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Christie Caruso and Sarah West are among hundreds of thousands of married gay couples in the US [Christie Caruso and Sarah West/Al Jazeera]

When Christie Caruso, 31, and Sarah West, 29, were planning their wedding, they knew it was going to be big.

“Weddings are very important in my family,” Caruso told Al Jazeera. “We’re Italian, we have a big family, everyone wants to be there, so it was going to be somewhat expensive, and Sarah also has a big Italian family who feels the same way.”

So Caruso, an event planner, and West, a school counsellor, budgeted $40,000 for their wedding. They married on July 1, 2017, in Connecticut, decked out in beautiful white dresses and surrounded by bridesmaids and groomsmen in blue. For the pair, the day symbolised something more than a sweet ceremony and a big party: the acceptance of their love as a same-sex couple.

“It was important for us to have such a big wedding because everybody that we know accepts it, and that was really important for us: just showing people that we love each other,” Caruso said. “Even if you don’t understand it, we want you to see we love each other just as a man and a woman do.”

In the four years since the US Supreme Court legalised same-sex marriage in all 50 states through the Obergefell v Hodges decision, same-sex marriage rates have climbed, and 10.2 percent of LGBT Americans were married to a same-sex partner in 2017, up from 9.6 percent the year before, a Gallup poll found.

Around the world, a total of 24 countries have legalised same-sex marriage, according to the World Population Review. Most recently, Taiwan became the first place in Asia to legalise same-sex marriage on May 24, and during the debate over the measure, several major multinational companies spoke out about the economic boost the island could expect from legalisation, Reuters reported.

Researchers have found that aside from granting same-sex couples the same rights, respect, recognition and benefits as heterosexual couples, legalising same-sex marriage has economic benefits in both the short and long term.

Weddings profit states

Those benefits start with the economic boost from weddings like Caruso and West’s, according to researchers at the Williams Institute, an independent think-tank at the UCLA School of Law that conducts research on public policies around sexual orientation and gender identity.

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Around the world, a total of 24 countries have legalised same-sex marriage, according to the World Population Review. [Christie Caruso and Sarah West/Al Jazeera]

Williams Institute Senior Counsel Christy Mallory and her team estimated wedding-related spending by same-sex couples over the first three years of marriage equality in each state, including the effect on state and local tax revenue and tourism dollars from out-of-town wedding guests. Same-sex couples “pump money into state economies as they plan their weddings and celebrate their milestone,” they found.

“Together, those reports found that after marriage had been extended in all states, a combined total of $2.6bn could be generated, leading to $184.7m in state and local tax revenue and supporting 13,000 jobs,” Mallory told Al Jazeera.

And the economic effect of same-sex weddings in the year immediately after the landmark 2015 Supreme Court decision was huge, Mallory and the Williams Institute team found in their research.

“We estimated that 123,000 same-sex couples married in that year, which boosted state and local economies by an estimated $1.58bn, generating an estimated $102m in tax revenue and supporting up to 18,900 jobs in the year,” Mallory said.

Economic view of marriage

Aside from the immediate economic effect of same-sex weddings, there are longer-term economic benefits tied to marriage in general. Nobel Laureate economist Gary Becker first outlined an economic view of marriage in 1973, finding that married couples are able to produce more by pooling their resources, most notably time and money. It’s a reality Caruso has seen in her own life.

“It’s great, because being together, we have been able to split everything like rent and utilities. Sarah makes a little bit more than me, so she pays for the cars and the insurance, but then I’ll get groceries or any shopping that we need,” Caruso said. “When I was single, I really had to worry about stuff like that, because it’s expensive living on your own.”

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Aside from the immediate economic effect of same-sex weddings, there are longer-term economic benefits tied to marriage in general.  [Christie Caruso and Sarah West/Al Jazeera]

The couple rents an apartment in Bayonne, New Jersey, but hopes to buy a house in Connecticut, she said. Caruso said they balance saving for the down payment with day-to-day expenses as well as unforeseen ones, like getting their car fixed for a couple of hundred dollars when it broke down. And marriage has changed the way Caruso thinks about money, she said.

“When I was single, I would go out and spend money like it was nothing, which isn’t really the best thing to be doing, and Sarah is more of a person who likes to save,” Caruso said. “So getting married, that was really important to her for me to understand that we need to save money if we want to have children, buy a house and things like that.”

Dividing household tasks among two partners also allows everyone to do more, Becker found. That’s also true in Caruso and West’s household, she said.

“Sarah will cook dinner for us every night, and I’ll do laundry,” Caruso explained. “We’re very good at communicating and knowing how to split the work that needs to be done in our house so it’s pretty much equal for each other, so one person is not doing so much more than the other.”

Couples who live together and are not married also see this bump in their ability to produce more, but there’s more negotiation that has to go on, Becker found. Unmarried couples may also stay together for a shorter period of time, according to Wendy Manning, a sociology professor and the director of the Center for Family and Demographic Research and co-director for the National Center for Family and Marriage Research at Bowling Green State University.

“Cohabited couples are usually shorter term if they’re not married, which doesn’t mean they’re not committed to one another, but they are more fragile than marriages,” Manning told Al Jazeera. “There is also something about people who decide to get married, that once you made that commitment, you’re less likely to break up.”

But as a generation, millennials are waiting longer to get married, and much of it has to do with their sense of economic stability. The median age for first marriage hit its highest point on record last year: 30 years old for men and 28 years old for women, according to US Census Bureau data cited by the Pew Research Center.

Some of that delay is due to student loan debt, Manning said, which is causing millennials to put off everything from marriage to buying a home to having children. Homeownership rates for millennials aged 25 to 32 dropped nine percentage points between 2005 and 2014, a report by the Federal Reserve found, and the Fed attributed roughly 20 percent of the decline in homeownership among young adults to student loan debt, which has doubled in the last decade to about $1.5 trillion.

Saving for children

Millennials are waiting longer to have kids, too; the fertility rate in the US hit a 32-year low in 2018, according to the National Vital Statistics Report. While different-sex couples might put off having kids while they establish themselves in their careers or pay down student debt, same-sex couples have those as well along with other financial considerations before they start a family.

Many same-sex couples have to factor in the legal fees associated with adoption or the costs associated with artificial insemination, in-vitro fertilisation and other assisted reproductive technology in their “pathway to parenthood,” Manning said, “and certainly that’s going to be more expensive.”

“For same-gender couples who want to have families, these issues surrounding debt could be even greater for them. Just to form their families is going to be expensive, and then they’re going to have some of the same issues as different-gender couples in terms of paying for childcare, schooling and other daily expenses that occur,” Manning said.

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Same-sex couples filing joint tax returns in the US are “generally younger, higher income, and less likely to claim dependent children,” according to a Brookings Institute analysis of tax return data. [Christie Caruso and Sarah West/Al Jazeera]

Same-sex couples filing joint tax returns in the US are “generally younger, higher income, and less likely to claim dependent children,” an analysis of tax return data by the Brookings Institute found. But while 48 percent of different-sex couples claimed children as dependents on their tax returns in 2015, only 28 percent of female-female couples did and only seven percent of male-male couples did, Brookings found.

Caruso said she and her wife started a special savings account they plan to use to each have a child via artificial insemination someday. She anticipates it would cost $2,000 for each of them to get pregnant and have a child using the same donor sperm, but the couple wants to set aside $10,000 total in case either of them is unable to get pregnant on the first try. It is a challenge to save that money as well as a down payment for a house, she said.

“It’s very expensive for same-sex couples to want to have children. Adopting is definitely a cheaper way to do it, and we have thought about that, but we would definitely like one of us to have a baby, hopefully me first, if it’s possible,” Caruso said. “We definitely have our little savings account for having a child because it’s just expensive. It’s going to take some time, but we’ll get there probably in about a year or two.”

Marriage equality at risk?

But with a conservative-leaning Supreme Court, some couples worry marriage equality in the US could be undermined. On June 17, the Supreme Court threw out an Oregon court’s ruling against a bakery that refused to make a wedding cake for a same-sex couple. Discrimination against LGBT individuals and same-sex couples remains a major issue in the US.

Caruso said she has a simple message for those who don’t understand same-sex couples.
“We’re doing the same exact thing that everybody else is doing, it’s just we’re both women,” she said. They are also now contributing to economic growth in a new way: as a legally married couple. “We’re paying bills like everybody else, we’re going grocery shopping like everybody else, we’re working every day trying to save up like everyone else is trying to do. That’s just it.”

Source: Al Jazeera