FPI-Logo-Institute-highres.jpg

FB-icon.jpgTwitterLogo_-sq48.png

kids-and-parents-on-carousel-horses.jpgTIME.

Time is the elixir for family prosperity. So, STOP WASTING TIME sitting in traffic going to the store, fighting crowds of shoppers, and waiting in the check-out line. Instead, shop at our sister website, FPI Ventures, and spend more time having dinner, playing boardgames, or reading books with your children. Such family activities are proven to boost family well-being and prosperity.

 

FPI Ventures specializes in officially licensed children's clothing, shoes, and accessories. Your child can enjoy quality clothing along with their favorite characters. A portion of your purchase goes toward supporting our engagment in data-driven, fact-based research supporting family prosperity in America. 

Family Prosperity.JPG

 

EXECUTIVE SUMMARY

 

[Note: Text that references rankings, charts, and data will be updated as work progresses on the 2020 Family Prosperity Index.]

 

The Family Prosperity Index (FPI) provides federal, state, and local policymakers—as well as religious and civic leaders and community-minded citizens—the roadmap needed to develop economic and social policies that improve the well-being and prosperity of American families and their communities. No other measure provides more credible and comprehensive insights into how the economy affects families, and how families affect the economy.

 

Unlike Gross Domestic Product (GDP), the unemployment rate, and other standard measures of economic performance, the FPI recognizes the vital, central role that families play as the engine of the American economy. Only by recognizing the central role of the family can any measure of the economy provide a complete, accurate, and useful picture of American prosperity and cultural well-being.

 

The FPI has six major indexes: Economics, Demographics, Family Self-Sufficiency, Family Structure, Family Culture, and Family Health. Each contributes 16.67% to the total index, and each has five sub-indexes (weighted equally at 20%). The FPI uses 60 measurements, or variables, of social and economic data (see Table 14 in the Appendix), and each sub-index uses at least one of these variables. If a sub-index uses two or more variables, each variable has an equal weight. Regardless of how a variable is used, it has two measures: its level (worth 80% of its value) and its 5-year average annual growth rate (worth 20%).

 

The Economics index broadly explores the two factors that most directly influence the financial well-being of families—income and employment. Defining “income” and “jobs” turns out to be a complex task. Not all income is the same: A $75,000 income in Manhattan, New York, will not support the same lifestyle as a $75,000 income in Manhattan, Kansas, and a state in which many people earn income in the public sector will be different from one in which relatively few do. A job, furthermore, may not be the one that expresses a person’s highest and best use. The five sub-indexes of the Economics index are:

 

  • The Private Sector’s Share of Personal Income
  • Per Household Income
  • Cost of Living
  • Entrepreneurship
  • Unemployment

 

The Demographics index reveals that the Baby Boom generation is followed by significantly smaller generations. Some are so small, in fact, that maintaining current population levels in several states, including Maine and West Virginia, is already impossible without strong migration from other states, or even from outside the country. Scholars call this condition “Demographic Winter.” The five sub-indexes of the Demographics index are:

 

  • Percent of Population Under Age 18
  • Percent of Population Over Age 65
  • Net Natural Population Change
  • Net Domestic Migration
  • Fertility Rate

 

The Family Structure index is based on the fact that families drive the American economy. When families break down, the economies of communities suffer. Families live in the institutional structure of marriage, and this index measures the extent to which marriage influences prosperity. The five sub-indexes of the Family Structure index are:

 

  • Children in Married Couple Households
  • Marriage Rate
  • Divorce Rate
  • State of Households
  • Families with Related Children in Poverty

 

The Family Self-Sufficiency index measures the degree to which families are free to pursue their own happiness. The amount of freedom ranges from zero if an individual is incarcerated to total freedom when he or she is able to engage in charitable work without economic constraints. In a similar way, social pathologies are created or reinforced in a less-free environment and mitigated in one that is more free. The five sub-indexes of the Family Self-Sufficiency index are:

 

  • Prison Population
  • Medicaid Spending
  • Welfare
  • Government Burden
  • Charity

 

The Family Culture index measures the extent to which the culture of the family supports bringing children into productive adulthood. The value of a supportive culture can be seen by its absence: The roots of pathology that put an individual on a path to committing crime as an adult are formed in childhood. At the same time, a strong sense of religion or a higher level of educational attainment can lead a person to a successful and productive adulthood. The five sub-indexes of the Family Culture index are:

 

  • Births to Unwed Mothers
  • Violent Crime Rate
  • Property Crime Rate
  • Religious Attendance
  • Educational Attainment

 

The Family Health index measures the physical and mental well-being of the family through the health of each individual member. An unhealthy family member creates an economic drag on the unit as a whole through lower income (due to reduced productivity), increased medical expenses, and lost income (due to death of a provider). The five sub-indexes of the Family Health index are:

 

  • Years of Potential Life Lost
  • Risk Behavior
  • Sexually Transmitted Diseases
  • Infant Survival
  • Self-Mortality

 

Through the six indexes as well as its overall score, the FPI comprehensively measures the economic and social factors that contribute to family prosperity, offering a way to measure what GDP does not. A state that scores high on the FPI is moving toward the goal of facilitating family prosperity, whereas a state that scores low is moving in the opposite direction.

Here are the top 10 and bottom 10 states in the 2020 Family Prosperity Index:

 

INTRODUCTION

 

Robert F Kennedy.PNG

 

“But even if we act to erase material poverty, there is another greater task, it is to confront the poverty of satisfaction - purpose and dignity - that afflicts us all.  Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things.  Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product - if we judge the United States of America by that - that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage.  It counts special locks for our doors and the jails for the people who break them.  It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl.  It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities.  It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children.  Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play.  It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.  It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.  And it can tell us everything about America except why we are proud that we are Americans.”

            -Robert F. Kennedy, University of Kansas, March 18, 1968.[1]

 

The Family Prosperity Index (FPI) broadens the definition of the word “prosperity.” Commonly used metrics, such as Gross National Product, or its more commonly used equivalent today, Gross Domestic Product (GDP), define prosperity merely as an amorphous aggregate measured strictly in economic terms.[2] But such measures fail to provide a complete picture of family prosperity because they ignore the social factors that determine the quality of our lives.

 

Adjusting commonly used economic data, such as converting GDP into per capita GDP or adjusting income statistics for a region’s cost of living, have some value. But even these steps leave much to be desired. One reason is that even then, the data do not include the contributions children make to the lives of their families. And economic data do not always convey how valuable parents are to children. As one philanthropic leader said as he spoke of his wife and the mother of his children, “GDP only sees her when she goes to the grocery store. GDP does not see her as she teaches my three children how to make a good life.”[3]

 

Any measure of prosperity should give a snapshot of how well families are doing, but their well-being cannot be measured only in dollars and cents. Families seeking a reliable gauge of prosperity when deciding where to live and work look beyond economic measures like GDP. They take a more holistic approach that considers such factors as safety, opportunity, and the education level and health of a community, to name a few. In turn, the places that perform the best on these factors are the ones that truly prosper.

 

A landmark study published in the Quarterly Journal of Economics links economic health to differences found in family life and other factors that vary across states and cities:

 

“Intergenerational mobility varies substantially across areas. For example, the probability that a child reaches the top quintile of the national income distribution starting from a family in the bottom quintile is 4.4% in Charlotte but 12.9% in San Jose. The spatial variation in intergenerational mobility is strongly correlated with five factors: (1) residential segregation, (2) income inequality, (3) school quality, (4) social capital, and (5) family structure.”[4]

 

Another study also found the same link between family life and the economy:

 

“. . . [S]hifts in marriage and family structure are important factors in states’ economic performance, including their economic growth, economic mobility, child poverty, and median family income.”[5]

 

Recognizing the family’s importance to the economy, the FPI comprehensively measures the economic and social factors that contribute to family prosperity, offering a true alternative to measures such as GDP.

 

The leading state in the 2018 Family Prosperity Index is Utah, with New Mexico performing the worst (Chart 1 and Table 1). Since the report compares states to each other, the measured performance of the country does not change from year to year, though that of each state does.

 

METHODOLOGY

Construction

 

In technical terms, the Family Prosperity Index is hierarchical, meaning that the score it creates for each state is built from scores of the six major indexes. Those major indexes are Economics, Demographics, Family Self-Sufficiency, Family Structure, Family Culture, and Family Health. Each major index carries the same weight, contributing 16.67% to a state’s final score, and is comprised of five sub-indexes of its own. Those sub-indexes are each worth 20 percent of their major index, and use one or more of 60 possible variables. Each variable within a sub-index is made up of two components: its level (worth 80%) and its 5-year average annual growth rate (worth 20%). Within a sub-index, each variable (usually) carries an equal weight.

 

The data for this comprehensive set of variables come in several forms and from many sources, which ensures the results in this publication are not just the artifacts of a few sources. The data range from pure survey data (e.g., American Community Survey published by Census Bureau) to pure administrative data (e.g., income data published by Internal Revenue Service) to hybrid survey/administrative data (e.g., data from Bureau of Economic Analysis).

 

Relative Index

 

The FPI is a relative index, which means it compares each state to the 49 other states and not to an ideal status. For instance, Utah is ranked the best among the 50 states, but many of its measures are declining on an absolute basis over time, even if more slowly than in the other states (see the Trend Index section).

 

To take one measurement, Utah has the highest percent of population under 18, giving it the top score in this sub-index of the demographics index. But this statistic was lower in 2016 (30.2%) than it was in 2000 (32.2%), meaning its absolute value went down. What should that number be, ideally? The FPI does not answer that question, for it does not define an optimal level for this or any other variable.

 

Normalization

 

The scores for each sub-index are “normalized” before they are compiled into a major index. That is, the scores of each state are adjusted so that the 50-state average for any measurement is a 5 on a 10-point scale. This ensures that we can compare states to each other. In some instances, there may be an outlier state — one that scores very high or very low compared to others — that compresses the score of other states significantly above or below the average score of 5.00. This, in effect, may increase or decrease the importance of that sub-index within its major index. In addition, under normalization, many states can score a 10.

 

Dynamic Relationships

 

The FPI is static, which means that a change in any one variable only affects the score of that variable and not others. We plan to make the FPI dynamic, so that a change in one variable will impact the score of two or more variables. (For example, an increase in charity may lead to a decline in welfare spending.) We will introduce dynamic relationships between specific variables through a series of issue papers over time. When that happens, we also will update the FPI online database.

 

TREND INDEX

 

The FPI is a snapshot, which means it doesn’t indicate whether the long-term trend of the FPI or any of its major indexes is positive or negative.

 

The Family Prosperity Trend Index (FPTI), however, does measure change over time — in particular, from 2003 through 2015. It does so through a measurement called the average annual percentage change (AAPC).

 

The trend for the overall FPI was negative from 2003 through 2015, with an AAPC of -1.8 percent (Chart 2).[1]  Only two indexes — Economics and Family Culture — had a positive change, meaning that a majority of the major indexes had a downward trend. Though some states may improve their performance relative to each other, the nation as a whole is doing worse.

 

To better illustrate this, Chart 2 shows the FPTI for the top-ranked state (Utah) and bottom-ranked one (New Mexico) in the 2018 FPI. Utah showed a positive trend in the Economics and Family Culture major indexes. But its overall FPTI was still down 1.2 percent, signaling a decline. New Mexico enjoyed a very slight positive trend in the Family Structure and Family Culture major indexes, but its overall trend was down substantially, with a -4.1 AAPC.

 


[1]      Migration and cost-of-living variables were excluded for the U.S. average since they net to zero at the national level.

 


[1]http://www.jfklibrary.org/Research/Research-Aids/Ready-Reference/RFK-Speeches/Remarks-of-Robert-F-Kennedy-at-the-University-of-Kansas-March-18-1968.aspx

 

[2]      Even data that appear to be morally neutral are laden with value judgements. The standard accounting of GDP assumes that any time a dollar changes hands, the result is human betterment. But money spent on abortion, gambling, and divorce proceedings, to name a few services, can carry significant costs in human development, not to mention, over time, standard economic statistics such as income. In addition, GDP excludes beneficial nonmarket activities, such as the work done by state-at-home moms, thus understating human welfare. For more information, see: Warcholik, Wendy P., “Some Economic Applications of Evangelii Gaudium,” Crisis Magazine, December 3, 2013. http://www.crisismagazine.com/2013/some-economic-applications-of-evangelii-gaudium

 

[3]      Stan Swim, president, GFC Foundation, personal correspondence to the authors

 

[4]      Chetty, Raj; Hendren, Nathaniel; Kline, Patrick; and Saez, Emmanuel, “Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States,” Quarterly Journal of Economics 129(4): 1553-1623, 2014. http://www.equality-of-opportunity.org/assets/documents/mobility_geo.pdf

 

[5]      Lerman, Robert I.; Price, Joseph; and Wilcox, W. Bradford, “Strong Families, Prosperous States: Do Healthy Families Affect the Wealth of States?” American Enterprise Institute and Institute for Family Studies, 2015. https://www.aei.org/wp-content/uploads/2015/10/IFS-HomeEconReport-2015-FinalWeb.pdf