Dollars and Sense: The Economics of Gay Marriage

Douglas Allen is a Canadian expert on the economics of social institutions. He has discussed same sex marriage from an economic point of view in articles in leading law journals. MercatorNet interviewed him about the consequences of legalising same sex marriage.

Q: You argue that marriage is an institution with its own norms which exists in many different legal systems. So what are the basic characteristics of marriage?

A: I think is important to think of marriage as an “institution” rather than some other metaphor. Perhaps the worst way to think about marriage is “as a contract.” A contract is a legally enforced agreement between two people, and although marriage contains this element, there is much more to marriage than this. An institution is a collection of expectations, norms, and humanly devised constraints that work together towards some social objective. Across cultures and time there are a number of basic institutional characteristics of marriage that are relatively constant.

These characteristics would include the following. First, there is a strong contractual element to marriage. Marriage almost always requires some degree of consent between the husband and wife. Even in arranged marriages, the individuals are almost always involved in some extent and often have veto powers. In modern marriages, the couple determine a number of the details of marriage. For example, how things are to be shared, produced, and monitored are matters left up to the couple.

Second, marriage always has involved third parties. Families are involved in marriages, but so are extended family members, non-blood relations, and third parties like the church, state, or tribe. These third parties often regulate the terms of entry into and exit from marriage. Here is where marriage starts to move beyond mere contract. Whereas contracts can be customized between two people, marriage regulations are common across couples. The meaning of marriage for one couple in British Columbia is the same for another couple. Every couple within a jurisdiction faces the same entry and exit conditions.

Among these third party regulations we see many similarities across time and space. Marriage has always been a life-long arrangement (although recently in Mexico City some politician suggested making marriage a matter of a renewable two-year contract). Marriage has, until very recently, been heterosexual. For the most part marriage has centered on monogamous relations, although there are many instances of polygamous ones. Marriage is always a sharing arrangement. Rather than one spouse “hiring” the other, couples form unions and share in the good and bad times.

Finally, marriage is the institution that all societies have used as their first choice in raising children.

These similarities do not mean that one cannot find exceptions. In the history of mankind all sorts of institutions have been used to regulate sex. What we know is that these isolated cases were unable to grow in numbers and wealth. As a result they either died out or quickly converted when contact was made with other civilizations. In addition, often events in life (such as death) have meant that second-best arrangements have had to be made to accommodate children. Hence, most societies have had to develop welfare systems around marriage that include multiple marriages, adoption, and the like.

Q: Is it possible to create laws which will accommodate both heterosexual and homosexual couples?

A: I think it is, but not without a cost. Let me first say that there are four major categories of costs and benefits of including any type of couple into marriage. There are costs and benefits of including, and there are costs and benefits of excluding. Most of the debate on gay marriage focus on just one or two of these categories, and as a result there is much confusion. Let me spell them out before answering your question:

Inclusion Benefits: These are the private benefits a couple gains from marriage, plus any social benefits. Most believe that the major social benefit of marriage is a sufficient quantity of high-quality children to perpetuate the society.

Inclusion Costs: Any type of couple that is included into marriage that requires a redefinition of marriage imposes a cost on the existing types of couples. Marriage has been designed for monogamous heterosexual couples. Any change to its institutional structure to accommodate others, must impose costs on the existing marriages. This is the argument of my paper in the Harvard Journal of Law & Public Policy.

Exclusion Benefits: Every society has values that pass judgement on various types of unions. Some believe that polygamy is moral, others believe it is immoral. Some believe that gay marriage is good, others believe it is bad. When a type of marriage is excluded, those who believe this type of marriage is wrong benefit. These benefits must be included in the decision to allow the type of couple into the franchise of marriage.

Exclusion Costs: When a type of couple is excluded, the benefits they would have achieved in marriage are not realized, and this is a cost. In addition, some clerk somewhere has to be able to tell if a couple should be excluded, and this logistical problem also is a cost.

I have argued that the inclusion benefits of gay marriage are small because (i) there are very few of them in total, and (ii) they produce very few children. In a recent paper examining same sex couples in Canada, I find that gays and lesbians make up on 3/4 of 1 percent of the population, and that across the entire country there are only about 33,000 children living with a gay or lesbian in the household. There are 10 million children in Canada, and almost all of these children come from a previous heterosexual marriage or common law relationship.

I have argued that the inclusion costs of gay marriage are high. The institution of marriage must be fundamentally redefined to accommodate same sex couples. This includes, most notably, the definition of parenthood and the rights associated with that.

The exclusion benefits are changing every day, and this is why same sex marriage is now a debate. Whereas 30 years ago very few people would have considered same sex marriage a legitimate form of marriage, in North America around 50 percent now consider it so.

Finally, the costs of excluding same sex marriage is low. Society forgoes little by excluding them, and the logistics of identifying a same sex couple are low.

Hence, from an economic point of view, same sex marriage should not be allowed. The costs exceed the benefits. Now to your question.

The key element, in my opinion, is that the inclusion costs must be eliminated. Here is the major problem. By having one type of marriage for three different types of unions (and gays and lesbians are very different types of unions), we end up with major costs. If we could eliminate these costs, then same sex couples could enjoy the private benefits of marriage while only hurting those who think it is wrong.

The way to do this is through some type of civil union, or to have two types of marriage co-existing. The former has been tried. The latter has not. The problem with doing the latter is that it does open the door of “marriage as contract.” If same sex couples get to have a customized marriage, then why can other couples not also have customized marriages? If we go down this road, then marriage pretty much loses all meaning.

So, my answer would be: if we can create something called “same-sex marriage” that is not binding on heterosexuals, and which does not open the door for other custom marriages, then this is one way of accommodating everyone.

Q: How are heterosexual, gay and lesbian relationships essentially different?

A: Of course the fundamental difference between opposite and same sex unions is the ability of the former to cheaply procreate. In a recent paper I have examined this difference and found that it alters many behaviors. In particular, same-sex couples, given the higher costs of children, have fewer children. The costs of procreating are higher for gays than lesbians, and gays have many fewer children than lesbians. Because they have fewer children in their households, gays and lesbians partake in behaviors that are not complementary to children. They consume more alcohol, drugs, and cigarettes than heterosexuals. For both gay men and lesbians, they are more likely to have multiple sex partners, both as singles and couples.

Finally, because children are unlikely in a same-sex relationship, gays and lesbians sort on different criteria when seeking a mate. In particular, I find that they are less concerned about the genetic fitness of their partners. This makes sense since heterosexuals have to worry about the genetic traits their spouses will pass on to children, and they want a healthy spouse to be around for the entire duration of child rearing.

All of these factors help explain another factor that has been observed in same-sex unions: they are less stable than opposite-sexed ones. One study done in Norway and Sweden found that lesbians were six times more likely to divorce compared to heterosexuals, and gays were three times more likely to divorce.

It is not so much that children hold marriages together (which they probably do), but that those interested in children are also interested in long-lasting relations. The absence of children means that gays and lesbians are generally getting something out of their relationships that is different (eg, companionship). There’s no particular reason why one should have the same companion or sex partner for life once children are out of the picture.

Q: Do these differences have consequences?

A: They certainly do, as I’ve just pointed out. From an institutional perspective, they also mean that gays and lesbian relationships are likely to require different types of regulations. Even when children are present, they likely arrive by different channels. These different channels require different forms of management. As has become clear in the Netherlands, over time, there are now several different categories of parents with different levels of rights.

Q: How can changing the law to accommodate the demands of samesex couples possibly harm heterosexual marriages?

A: Let’s take one example. Historically the definition of parent has been “natural parent” which has meant “biological parent.” There can only be two natural parents, and someone who is the biological parent has been given an entire set of rights and responsibilities. These rights and responsibilities have been designed to manage the problems that arise in procreation. Societies have wanted parents to have the proper incentives to remain married and to look after their offspring. It has always been a serious matter to alter these rights and responsibilities.

Well, natural parenthood makes no sense when you introduce same-sex marriage, because if there are children one of the spouses is not biologically connected. In jurisdictions that have same sex marriage there is always some type of redefinition to accommodate this. In Canada we created a concept called “legal parent.” In British Columbia this has meant a birth certificate asks for the mother’s name and the “co-parent’s” name. The concept of “father” has been reduced. More significantly, there can be more than two legal parents. There have been a host of legal cases involving divorce where biology has no standing and non-biological but legally-connected parents have been given custody. This is a dramatic shift in the rights of parents, and affects the way parents behave. The impacts of these are yet to be fully seen.

Q: What has been the experience in Canada, after the definition of marriage was changed?

A: Well, that is a good question. Most of the outrageous cases have not been held up by the courts. So, for example, when BC introduced same-sex marriage there were many couples from the US who came up and got married. They then went back home, and within a few years wanted a divorce. This put them in limbo. The states they resided in did not recognize their marriages, and so would not grant a divorce.

However, BC has a residency requirement and would also not grant the divorce. A lawsuit was launched demanding that BC allow divorces to non-residents. If passed it would have made BC a divorce mill. Fortunately, it was defeated, but this just shows yet another unintended consequence.

One immediate change was the subsequent change of all divorce laws. Of course, the meaning of marriage in the culture has changed. But, the measurable effects are not known yet, and unfortunately it will take some time before they are known.

Q: Many people say that adverse consequences of legalizing samesex marriage are just social science scaremongering. But you argue that we should learn from the legalization of no-fault divorce.

A: Yes. This gets back to my fundamental point: marriage is an institution designed with a purpose. If you mess with it, there will be consequences.

During the no-fault divorce debate the same arguments were made that are heard today: “marriage is a formalization of love.” Hence, if a couple no longer loves each other, why shouldn’t they be allowed to divorce? The view was that there exists an exogenous number of dead and living marriages, and so the law was only setting free those trapped in a dead marriage.

Well, guess what? Marriage is designed to mitigate bad behavior, and by allowing individuals to unilaterally abandon their marital responsibilities there was a lot of bad behavior.

In the 1960s debate, no one thought the divorce rate would change, but it changed enormously and led to a divorce culture. No one thought there would be changes to labor force participation, hours worked, violence against spouses, suicide rates for children, and on and on. And yet, changes to these thing are linked to no-fault divorce.

The no-fault divorce experiment proves that marriage is an institution designed with a purpose, and therefore, further changes to accommodate same sex couples will also have consequences. As in the 1960s we’re probably unable to predict what they all will be, but they will come nonetheless.

One of the overriding purposes of marriage has been to encourage fertility. Every couple wants to have one baby, but not enough want to have enough to replace or grow a population. This has been a social problem for 3,000 years (ask the Spartans). Over the past 100 years we’ve been able to dodge this bullet through high levels of wealth and immigration, but as we continue to erode the value of marriage, reduced fertility is likely a long-term consequence.

Douglas W. Allen is Burnaby Mountain Professor of Economics at Simon Fraser University, in Vancouver, British Columbia. His latest book is The Institutional Revolution (U Chicago Press). He is also a member of the Ruth Institute’s Circle of Experts.

For Further Reading
Douglas W. Allen. “An Economic Assessment of Same-Sex Marriage Laws.” Harvard Journal of Law & Public Policy. Vol 29, No 3. 2006.
Douglas W. Allen. “Who Should Be Allowed Into the Marriage Franchise?” Drake Law Review. Vol 58, 2010.

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