Monday, September 15, 2014

Getting married? Or divorced? Understand the economics.

Much of the cost and animosity involved in divorce is due to government heavy handed regulation of marriage and the divorce industry, says this author.

“Married couples’ "wealth increases on average 16 percent for each year of marriage. Divorced respondents’ wealth starts falling four years before divorce and they experience an average wealth drop of 77 percent.” In terms of percentage, women were more likely than men to be harmed by divorce, but the absolute difference between the two was “relatively small.” More recent research supports Zagorsky's basic insights

Two factors contribute heavily to the financial decline surrounding divorce: losing the inherent wealth-creation aspects of marriage, and State-imposed costs such as alimony and “the divorce industry.” The divorce industry consists of the laws and state agencies that regulate the terms of a divorce, as well as the professionals, such as lawyers and social workers, who make it function.”

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