No one saw the shift in American family life coming. During the 1950s and 1960s, family formation in early adulthood occurred in a lockstep pattern of marriage followed by childbirth, sometimes within 9 months of the wedding date. This shift to the modern dynamic, with its diverse pathways to family formation, came as a shock to family scholars, even family demographers who forecast societal trends (Furstenberg, 2014). A host of doomsday scenarios proliferated in the literature. Popenoe (1993) argued "that this period has witnessed an unprecedented decline of the family as a social institution" (p. 528).But family change has resulted in a two-tier family system (Cherlin, 2014;McLanahan & Jacobsen, 2015). In one stratum, highly educated couples live together and eventually marry, usually in their early 30s and prior to having children; in the other stratum, couples have children in their cohabiting union or move in together after a pregnancy, but they never marry. In this chapter, we show that even though much is known about trends in cohabitation and single parenting, very little is known about the mechanisms underlying these trends. This is an area where psychologists have much to contribute.