We examine resource allocation in step-households in the United States and South Africa to test whether child investments vary according to economic and genetic bonds between parent and child. In the United States, households spend less on food when a child is raised by a nonbiological mother. The reduction is identical for step, adoptive, and foster households, consistent with the hypothesis that genetic ties are the ones that binds. In South Africa, where food spending can be disaggregated, households spend less on milk, fruit and vegetables, and more on tobacco and alcohol, in the absence of a child's birth mother. Family living arrangements have changed dramatically in the United States in a generation. Children in the middle of the century were, on the whole, born to married parents, with whom they lived until adulthood. In the United States today, over half of all children will live apart from at least one parent before reaching age 18 (Bumpass and Sweet, 1989), and a majority of these children will live with a step parent or foster parent. Until recently, most academics were not very concerned about changes in children's family structures. During the 1970s, single parenthood was viewed as a time of transition (Ross and Sawhill, 1975) between divorce and remarriage, and step families were considered to be good substitutes for original twoparent families. Since the 1980s, however, several developments have challenged this optimistic view. First, declines in remarriage have lead to extended periods of high poverty for single mothers and their children, undermining the notion that single parenthood is a time of transition. Second, a growing body of research has shown that children raised by only one of their parents are less successful than children raised by both their parents, when measured across a broad array of outcomes. Although some of these disadvantages are due to characteristics of the parents that predate divorce, there is mounting evidence that parent-absence itself plays at least some causal role in reducing children's life chances. (McLanahan and Sandefur, 1994; Haveman and Wolfe, 1994). A primary mechanism behind the