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. In recent studies, there has been a significant link between divorce rates and economy health. Here is a look at how divorce can directly impact the economy, and where the divorce rate stands today.
Divorce Slows Economic Growth
There are few things than can slow economic growth quite like a high rate of divorce. According to a study performed by the Marriage and Religion Research Institute, marriage is an important contributor to economic growth. Healthy marriages have been proved to promote economic growth, while divorce adversely impacts the economy. Another factor that affects economic growth is the increase of total households. When couples are divorced, more housing, power and resources are required.
The more the divorce rate increases, the more adverse the affect on the economy.
Changing Family Formula Driving Down Divorce Rates
A commonly-quoted statistic regarding the topic of divorce is "The divorce rate in the United States is 50% of all marriages." 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. Divorce rate is calculated for a number of different groups divided by age, whether this is the person's first marriage, gender and more. The average divorce rate in the U.S. for a first marriage is actually 41%, according to Divorcerate.org. 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 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 an article written by CNBC.com in March 2012, the average age in 2009 for men to marry was 28, and for women, 26. This is a far cry from the average ages in 1950, which were just 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 a result of people waiting to marry, as well as modernized family restructuring.
How the Divorce Revolution Impacts 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 in March 2012, there is no equivalent byproduct of policy change that can wreak havoc on a country's economy quite like 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.