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The Macroeconomics of Divorce

The Economy Has An Impact on Divorce Statistics

When I stumbled on to the reality that the frequency of divorce has something to do with the economy, I was a bit….wowed.  But, now that I look at it with an analytical eye, it makes sense to me.

Had my ex- not been paid well, we probably wouldn’t have gotten divorced either but here are the stats from the Center for Disease Control:

CDC: Divorce Trends 2000-2010

So, what is it that contributes to this trend?  In one short answer: the ability to liquidate and the cost of new household formation.

When times are good, economically speaking, there are funds to start a new household and the real estate market has some movement so that the family house can be sold and the equity liquidated.

What we’re finding is that more couples are staying together because…they can’t afford to split up: houses are “under water,” and/or there isn’t enough cash to move into a new place nor pay for spousal support and custody.

As can be seen from the table at right, divorce rates are down from a high in the year 2000 (4.0 per 1,000 total population — this is the way the whole world measures it) to 3.6 per 1,000 in 2010.

I wonder what 2011’s data will reveal.

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