Nery Martinez

Kerry MacNamara
Economics 2010
December 9, 2016
The Correlation between the Economic Crisis and the Divorce rate
The large-scale economic crisis has crumbled the economic foundation of households
across the U.S. An economic downturn is characterized by increased experience of economic
hardship and stress, which in turn may increase marital stress and marital dissolution
(Harknett). In November 2009, the unemployment rate reached an all-time high of 10.2%.
Between 2008 and 2009, 7.1 million families faced foreclosures across the United States
(Chuck). These unpredictable economic instabilitys have created uncertainties for marriages. In
spite of this; the economic downturn may have also helped prevent several divorces especially
for those couples that cannot afford to provide separate households ( Harknett).
In the last several years since the economic down turn the divorce rate has been gradually
declining, many economics believe that the divorce rate and the downward economy have a
direct relationship meaning as one decreases the other also decreases (shown in figure 1). Before
we can say that the economy is the reason for the decline we must first

Figure 1

look at the utility of being married vs. being divorced.

Why do couples choose to get married in the first

Yea

place? There are several reasons children, love, and even money all
are factors in why individuals choose to get married (Chuck). The utility of

Marriag

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having someone to share your life with is very high compared to being alone, or always coming
home to an empty house. Love is important to many because they enjoy spending time with the
one they love and start to care about the wellbeing of that person (Friedberg).
Children are also a reason that many decide to get married, and are also a reason that they
decide not to for that matter. Children create a feeling of love and fullness in ones life, the
feeling one gets from birthing or seeing for the first time the life that they have created together
is unexplainable and improves ones utility or satisfaction. Children are considered public goods
because the birth of a child may increase the utility of both parents, as long as the parents live
together the utility that a child provides to one parents from the time they spend together is not
forgone by the other (Harknett).
Money is also a huge factor in the decision to get married; many people choose to get
married to someone that has more money than them to advance their career or for the sheer
pleasure of living a lifestyle that they otherwise would not be able to afford on their own
(Friedberg). The utility for that individual entering a marriage under these circumstances will
improve dramatically. They will increase their money income and their fore their budget far more
than they would be able to do on their own.
For all the same reasons listed above people choose not to get married or eventually get
divorced. The utility of having someone to share your life with and continuously love is very
special as stated above, but that utility can begin to deteriorate for a number of reasons that effect
marriages every single day, those may be a change in the spouses attitude or feelings toward the
other, infidelity, loss of a job, increased stress in the household, or even small things such as not

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spending time together or as much time together as they previously had, all decrease ones utility
of staying in a marriage (Harknett)..
Money seems to be one of the major factors in deciding whether to make things work or
get a divorce. If one individual in a marriage losses their job, their budget decreases. If that
person is the bread winner of the family then the loss will impact the household budget
drastically. This leads to increased stress and fighting, the utility of both partners may start to
decline due to the drastic change in the relationship (Friedberg). For many they see a divorce as
the only way out, believing that their utility will increase once the marriage is over. They could
start over with a clean slate. The loss of a job seems to be a major cause of stress in a marriage
do to the downhill economy that we face today
But is that true? It is no secret that the cost of getting a divorce is not cheap and has
increased over the last several years; from the price of hiring separate attorneys and diving up
assets, to starting over with a single income (Friedberg) but the most consuming of all is time.
The time spent in a court room at the expense of the salary you have forgone from missing work,
all the legal paper work takes time to fill out, and the time it takes to finalize the divorce all
dwindles ones utility that could have been spent on something more satisfying. so does one really
increase their utility by getting a divorce, the thought of losing assets such as vehicles, homes,
boats, RVs, etc. can all diminish ones utility in considering a divorce, they may choose to stay
together rather than decrease their utility and start over (Friedberg). Also the thought of having
to cover all the expenses on ones own can take a toll on an individuals budget, if children are a
factor in the divorce, both spouses must consider the cost of child support, loss of income from
time spent home with a sick child, loss of time spent with the child due to work schedules or

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sharing custody, All these circumstances begin to dwindle ones utility in getting a divorce
(Friedberg).
As stated above the unpredictable economic instabilitys together with the uncertainty of
unemployment, leads me to believe that the economic downturn may have helped prevent several
divorces due to the uncertainty of being able to afford or sustain separate household on only one
income. The marginal benefit of staying together is much larger than separating for many in this
disasters economy that we face today. Its easy to see that the economic crisis facing America has
had a huge influence on the way Americans think and act. In the study of economics there is a
saying that individuals will act rationally in their own self-interest (Miller). Marriage is a perfect
example of this theory; Americans have chosen to stay together and try to make thinks work due
to the uncertaintys facing the United States (Harknett).. The final phase in the studies of truly
knowing if the economy is what has influence the decline in the divorce rate will only be
accomplished when the economy has turns around and beings to recover then and only then will
economics truly be able to say that the decline in divorces has happened due to the economic
hardships facing Americans. As for now all things being equal, all research has indicated that
there is direct relationship between the economic down turn and the decline in the divorce rate.

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Sources
Chuck. "Economic Consequences of Divorce." HubPages. N.p., n.d. Web. 11 Dec.
2016.
Friedberg, Leora, and Steven Stern. "The Economics of Marriage and Divorce."
People.virgina.edu. N.p., Dec. 2003. Web. 11 Dec. 2016.
Harknett, Kristen, and Daniel Schneider. "National Poverty Center Working Paper
Series." Npc.umich.edu. National Poverty Center, Jan. 2012. Web. 11 Dec.
2016.
Miller, Roger LeRoy. Economics Today: The Micro View. 16th ed. Boston [etc.:
Pearson, 2016. Print.