"In creating the gain of wealth within the union of marriage, we, as a society, have to acknowledge the socioeconomic impact of individuals going through the divorce experience."
Many have considered the act of marriage to be the merging of two lives into one. Every facet of each individual life comes together, creating a new one with new opportunities and challenges on every level.
The merging of finances, places to live, and overall assets creates new socioeconomic opportunity that allows for new levels of personal comfort, but during the experience of a divorce, the level of comfort that you’ve grown accustomed to during the course of a marriage dissipates and creates a level of socioeconomic uncertainty that you haven’t known since you were first single.
Growing your wealth
Married couples’ overall financial wealth rises an average 16 percent for each year of marriage, according to the Journal of Sociology. Additionally, the study found that married participants experience a 77 percent per person net worth increase, in comparison to single participants.
Research at the University of Michigan’s Institute for Social Research found that a married couple that stays together ordinarily has four times the wealth of a single person. The study also found that the education level of the individuals involved contributed to their likelihood of getting married.
There also is data that suggests that these couples acquire funds from their families, helping them continue to build their own financial wealth. Shared expenses also create less need to spend more, allowing saving to become easier over the course of a marriage.
From another perspective, the study found that not having financial wealth deterred couples who might otherwise marry because they would like to gain greater financial security before getting married. According to the Institute of Social Research’s Pamela Smock, there is a level of financial privilege contributing to the decision to getting married, as opposed to those without that level of privilege, observing family life in an alternate way.
Division of finances
The Foundation for Economic Education found that there are a couple of elements that contribute to the financial decline involved in divorce. Due to the division between two sources of income, the wealth-creation aspect of marriage disappears, and the additions of alimony and legal fees dry up much of the built-up wealth.
There’s an element of investing in one’s self financially that comes to play when preparing for any next step in one’s life. When deciding where to go to college, you take a look and see what the program you’re interested is like at each university under consideration and allow that information to help you in your decision-making process.
Similarly, couples entering marriage save and invest financially more frequently, allowing them to build up wealth faster than single people or couples cohabitating. Cohabitating couples create another layer of difficulty in recording socioeconomic data on marriages and divorces. Because of the lack of commitment present, there’s less incentive for cohabitating couples to combine their resources, according to Today.
Impact of economic climate and regulations
The economic climate of the country can play a factor into the socioeconomic status of those entering marriage, as well as those going through the divorce experience. According to the Organization for Economic Cooperation and Development, from the mid-1990s moving forward, housing prices increased on average nearly 50 percent over the given years.
Unemployment rates also can create economic uncertainty, but with the unemployment rate falling to 4.9 percent, after being as high as 16 percent during the 2000s, the impact should theoretically be nominal.
State regulation also has an economic impact on divorce. The estimated $50 billion divorce industry has been sustained through the length of individual divorce processes. Despite the implications of an economic industry of that magnitude surrounding divorce, alternatives to courts and expensive attorneys, such as mediation and collaboration, exist, aiding those struggling with the division of finances and assets.
Children and social mobility
Children also create a socioeconomic impact on marriage and divorce. According to The Brookings Institution, single parents have lower incomes and significantly higher poverty rates than married parents. Educational and financial factors create reasoning for the disparity, but that does not explain the social mobility rates.
Social mobility rates are statistics that measure the movement of Americans from one socioeconomic level to another through marriage or job acquisition. Generations of children who live with continuously married parents have higher social mobility rates than those who have experienced either a long period of time with a single parent or a family divorce.
In creating the gain of wealth within the union of marriage, we, as a society, have to acknowledge the socioeconomic impact of individuals going through the divorce experience. This division could set them back years, or even decades, from the financial gain that they would have experienced in their unhappy marriages.
Seeing the differences within the statistics gives us a better understanding of what to expect entering marriages and divorces and how to prepare financially.