Divorce and the Business Cycle

INSERT DESCRIPTIONNaum Kazhdan/The New York Times

There’s an interesting discussion over at Room for Debate on how the recession is affecting family life. A key question is whether recessions lead to a rise in divorce or not.

Here’s Betsey Stevenson (my frequent coauthor and significant other):

While the economically vulnerable are in less stable relationships, there is little evidence that the economic cycle drives divorce. The big swings in marriage and divorce follow dramatic social, rather than macroeconomic change. Blame the wars, the sexual revolution, and changes in the meaning of marriage, rather than cyclical ups and downs.

Here’s Barbara Dafoe Whitehead:

The divorce rate soared during the stagflation of the mid-1970’s, continued to rise during the deep blue-collar recession of the early 1980’s, and thereafter stabilized at historically high levels.

And here are the facts (updating Betsey’s and my Journal of Economic Perspectives paper):

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The chart shows the two standard ways of measuring the divorce rate, and the shaded areas on the chart highlight the recessions. Contrary to Whitehead’s claim, the divorce rate actually fell during the early 1980’s recession. And she’s wrong to say it stabilized after that, as divorce rates continued to fall. In fact, divorce rates have been falling for the past 30 years. It’s time for social commentators to start to recognize these facts.

To my eye, the most amazing fact in this chart is just how little the divorce rate is affected by the business cycle. The 1970’s recessions didn’t see a sharp uptick in divorce, but rather the continuation of the pre-existing trend. Divorce rates declined during the 1980’s recession and barely changed during either the 1990 or 2001 recessions. And if we examine data over the longer run, again we see that divorce doesn’t seem to move around much with the business cycle:

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If anything, the Great Depression suggests that divorce rates may decline during dramatic slowdowns. Unfortunately my charts report only the most recent complete annual data, which are for 2007, while the recession began in December of that year. To learn about the consequences of this recession, we have to turn to the most recent NCHS data. And these data tell us that in seven months through to July 2008, the number of divorces is down about 6 percent compared with the equivalent period in 2007. That is, the ongoing decline in divorce is continuing.


Rosie

I think the recession is making us think twice before heading quickly to a divorce. I believe there are cases where there are not happy solutions, but in many cases trying harder will lead a better marriage.
We often act quickly and selfishly, as if breaking up would solve the problems within ourselves. Sometimes we just need to act more mature, learn to give up, and negotiate.
There is not eternal happiness, life is filled with frustrations and how we deal with them makes us stronger and more appreciative of the good moments we spend with our families. We must go on and try not to break out vows so quickly. This recessions is probably the best therapy to really try harder.

NRF

As a retired divorce lawyer, I can tell you that those two peaks in the divorce rate actually do relate to changes in the law. The first, shorter one relates to changes in the law in some states. The second coincides with a time when divorce laws changed in a great many other states. This was the beginning of the so-called "no fault" divorce, which made it possible for a great many people who were separated but unable to get a divorce in their home state to finally end legally marriages that had been previously "de facto" ended.
NRF

Matthew

Here is the UK date on rapidly declining marriage-rates, from the BBC:

http://news.bbc.co.uk/2/hi/uk_news/7314435.stm

It looks like they are demographically about 15 years ahead of the US in regards to this trend. (20 marriage/1000 vs. 40 marriages/1000 per annum).

Steve

"How about the dramatic drop in marriage rates? There has been an almost 50% drop in per-capita-marriage rates between 1969 and 2004."

These stats are always misleading. They are presented in a way to support the "marriage industry", those with an economic or "moral" stake in the institution.

Good stats would show time series for each year a marriage occurred and what percentage of the marriages had not ended in divorce as each year was completed. Of course, the final failure rate cannot be calculated until everyone marrying in a particular year has died but it will provide revealing trends. For instance, were marriages of recent decades more likely to fail in the first 2 years? Is there now, as we hear, a spike in divorces of people married over 20 years compared to earlier decades?

The raw statistics above are meaningless. People no longer need to be married and I suspect that there is a self selection process going on. Women in particular either don't get married because it suits them or select men on a basis that is not conducive to long term relationships. These effects may be canceling each other out.

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CandyKay

If divorce rates increased after redeployment of troops home after wars (WWI, WWII, Vietnam), shouldn't we expect to see a similar increase as troops return from Iraq?

Riley

Financial impact probably has a lot to do with divorces. However, it would be too simplistic to identify that as the only factor leading to divorces. It would definitely be interesting to see the additional statistics on the Roe v. Wade and law changes.
It is interesting to note though, that although financial issues are cited as a top issue among couples, divorce rates do not follow a strict financial pattern. In fact, it does not really follow a financial pattern at all. Which gives me some hope that marriage isn't all about financial security. I think that the explanation that couples stay together during economic difficulty is too simplistic. It may keep couples together but it certainly was not the cause of the divorce. If it were the cause, wouldn't the opposite be true, that a significant number of marriages fall apart right after the recession is over? But if we think about that logically, that doesn't make sense because if money was the issue, and then finances are better, why would you leave?
I think looking into social and moral issues would be the best place to start. However, you have to be careful about jumping to conclusions about those impacts as well.

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Sara

I wonder if divorce rates are higher these days because people have lower unhappiness thresholds (the point at which someone will do something drastic to change his/her happiness level), not because there are actually more unhappy relationships. If so... is a higher divorce rate really that terrible of a thing?

David

Sara makes a good point. People's standards have changed. No body wants to settle for a life of so-so. And even pretty-good becomes so-so with time thanks to the law of entropy.

I think changing standards/thresholds is the reason why we have higher (but now slightly correcting) divorce rates, and sharply lower marriage rates.

Welcome to the age of self-actualization. Where we, sovereign men and sovereign women, don't "owe" anything to the tribe. And none of us are willing to take the fall for someone else's shortcomings.

Matthew

It's a good point that this thread brings new-marriage & divorce stats together in a single discussion. After all they really are two sides of the same coin. It looks like the concept of marriage is being eroded from two sides. More people are getting out of existing marriages, and also more people are not getting into new ones to begin with. Hence the skyrocketing single-parent births, and single-parent households, and outright-single households. All three categories skyrocketing by any measure.

Scipio

I'm a divorce lawyer in Hattiesburg, MS. Anyone in the business knows that divorces are cyclical on an annual basis, based around tax returns. Sad but true.

CB

One obvious confounding variable is the aging of the population.

The 30 year trend of declining divorces could well be due to the fact that as babyboomers age, they mellow out and become less likely to divorce. This is the case in my own extended family--lots of boomers divorced in the '70s and '80s. Not so much in the '90s or '00s.

Nancy liu

Helllo mister! Bueno first i want to say that this article made me uderstando more economic since this is a very interesting topic to talk about. It was amazing how we can see the ups and downs in the graphs, some peaks are really a question mark for me.