According to economic experts, the divorce rate and the strength of the economy are directly related. A recent article noted that as the economy is gaining steam, the number of divorces in the United States has increased for the third year, posting a 2.14 million gross increase in 2012.
Despite the emotional and financial consequences of divorce, divorces do result in the formation of new households, and new households increase demand for homes, appliances and furnishings, all of which promise a boost in economic activities.
According to an economist, once the economy normalizes, the family dynamics do so too. This means births and divorces increase as the economy picks up because many families put off life-changing events that have significant financial implications when things are already tight financially at home.
Statistics also reveal that 150,000 divorces were either avoided or postponed in 2009. After the recession, divorce rates increased, which coincided with the increase in household formation. This, in turn, increased the demand for housing construction and rentals.
Both marriage and divorce can affect unemployment. Decreases in marriage and divorce rates increase the jobless rate. A married spouse may opt to forego his or her career while a divorced spouse is likely to look for a job; specifically, more women are forced to seek employment because they are more likely experience a drop in income They must look for a job to support both their needs and the needs of their children.
There are several reasons why marriages end in divorce. Dissolving a marriage has significant emotional and financial implications. Important matters, such as property division, alimony, child support and child custody are often the reason why a divorce proceeding becomes contentious. No matter their economic circumstances, it is advisable for divorcees to understand with a rational mind the implications of a divorce.
Source: Bloomberg Businessweek, “Worsening U.S. divorce rate points to improving economy,” Steve Matthews, Feb. 18, 2014
