Rising Divorce Rates Mean Better Economy
Over the last couple of weeks we’ve seen Congressional Budget Office reports claim that Obamacare will lead to 2.5 million Americans leaving their jobs – which is a good thing because it means they have the economic freedom to pursue their dreams without risking their health insurance. As it turns out, the United States’ rising divorce rate is a signal of an improving economy as well, because people don’t have to stay in bad marriages for the sake of economic security.
According to Bloomberg, divorce rates in the United States increased for the third straight year in 2012 after plummeting to a 40-year low in 2009 following the economic collapse. According to a study by the University of Maryland, roughly 150,000 divorces were delayed between 2009 and 2011 because of economic concern. Not only do higher divorce rates signal an improved economy because people are less worried about their financial security if they leave their marriage, it also means more women are entering the labor force.
Moody’s chief economist Mark Zandi says “As the economy normalizes, so too do family dynamics. Birth rates and divorce rates are rising. We may even see them rise strongly in the next couple of years, as households who put off these life-changing events decide to act.”
According to a study by the University of Arizona, divorce rates are also very much tied to the unemployment rate. For every 1 percent increase in the unemployment rate, there is a 1.5 percent decrease in the marriage rate and a 1.7 percent drop in the divorce rate.
Not only do higher divorce rates mean more women in the labor force, it also means higher demand for housing. David Crowe, the chief economist at the National Association of Home Builders notes that “Separations and divorce often create additional housing demand by creating two households when there was one.”
Of course, divorce is hardly a happy ending for women. After a divorce, the average woman’s per capita household income drops by as much as 15 percent. “I have gone from an upper-middle-class mom to being a welfare mom,” said Stephanie Jackson, a recently divorced mother of two. “I am on food stamps and free lunches.”
Still, she says her divorce was “worth every moment of hardship. I had to take full ownership of my life, my choices, my future, and my happiness. I walk around with a smile on my face, I am very happy.”
(Image courtesy of pahlkadot)