It is no secret that divorces are expensive. Between hiring separate attorneys and dividing assets, to starting over again with a single income, the cost of divorce has increased in the past few years. While divorces are expensive for the parties involved, there are implications for the economy as well. Studies show there has been a significant link between divorce rates and economic health. Here is a look at how divorce can directly impact the economy, and where the divorce rate stands today.
- A high divorce rate hampers economic growth, as it increases the number of households, which requires more power and resources.
- However, divorce rates appear to be falling, in part, because men and women are waiting longer to get married.
- Changing family dynamics can improve divorce statistics, which will help the economy.
Divorce Slows Economic Growth
There are few things that can slow economic growth like a high divorce rate. According to a study performed by the Marriage and Religion Research Institute, marriage is an important contributor to economic growth. Healthy marriages have been proven to promote economic growth, while divorce adversely impacts the economy.
Another factor that affects economic growth is the increase in total households. When couples are divorced, more housing, power, and resources are required. The more the divorce rate increases, the more adverse the effect on the economy.
Driving Down Divorce Rates
A commonly-quoted statistic regarding the topic of divorce goes something like this, “50% of all marriages in the U.S. end up in divorce.” While this information has become common knowledge, is it accurate? It turns out that statement isn't as accurate or telling as the truth itself.
The divorce rate is calculated for various groups divided by age, whether this is the person's first marriage, their gender, and more. The average divorce rate for U.S. marriages is low as 40%, according to PolitiFact.com. While the average may have been higher at another time, there are some significant factors that may be driving down the average divorce rate in the U.S.
Changing family formulas and dynamics certainly come into play when considering the drop in the divorce rate. Women are largely becoming the breadwinners of their families. It appears the divorce rate is dropping as dual-income families have become the norm. Another important aspect of a lower divorce rate is the older average age at which people are now getting married.
According to the U.S. Census Bureau, the median average age in 2018 for men to marry was 30, and for women, 28. This is a far cry from the average ages in 1950, which was 23 for men, and 20 for women. While the divorce rate remains high, it has slightly improved over recent years, and this is believed to be a result of people waiting to marry, as well as modernized family restructuring.
Divorce Revolution vs. Economic Growth
With the divorce rate being so high, it has negatively affected America's potential for economic growth. According to an article written by BusinessNewsDaily.com several years ago, there is no equivalent byproduct of policy change that can wreak havoc on a country's economy as the divorce revolution can. Divorce not only affects the individuals involved, it can also deeply hinder a country's ability to climb out of a recession and improve economic growth.
The Bottom Line
While the divorce rate in the U.S. has certainly decreased in recent years, divorce continues to play its part in dragging down the country's economy. With divorce comes the need for more housing, energy, transportation, and other important resources. If the changing family dynamic continues to improve divorce statistics, the U.S. may experience the financial benefits that come from a healthy marriage—financial stability over a long period of time.