Last week, the CBO warned that Affordable Care Act’s subsidies will motivate 2.5 million low-wage workers to quit work at the expense of taxpayers–a 3-fold increase from its original estimate. In light of that inconvenient revelation, one can’t help but wonder what other unintended consequences this enormous subsidy might have, namely, on the increasing number of children born to single mothers–one of the largest causes of poverty and a concern about which the CBO has, so far, remained silent.
A recent comparison of OECD countries sheds light on this concern. It finds a percentage point increase in welfare spending relative to GDP (which represents about a 5% increase in spending) increases unwed births by 4.4%. Obviously, there are many pushes and pulls around any estimate like that, but in a country, like the US, where 50% of children born to high school graduates are born to unwed mothers, that ought to be a concern.