The Marriage Effect on Wealth

“If you really want to increase your wealth, get married and stay married,” says Jay Zagorsky, a research scientist at Ohio State University’s Center for Human Resource Research and author of a new nationwide study on the effect of marriage and divorce on a person’s wealth. “On the other hand, divorce can devastate your wealth.”

The study, which used data from 13 of the National Longitudinal Surveys of Youth conducted between 1985 and 2000, found that single people experienced a slow, steady increase of wealth. Couples who married see their wealth increase by more than just the sum of the wealth of two single people. Conversely, couples that divorce, see a decrease in wealth that exceeds the value of splitting their assets in half.

According to the study, singles saw their wealth grow from less than $2,000 at the start of the surveys to an average of about $11,000 after 15 years.

Married couples experienced a sharp increase in wealth just after marriage. Their wealth continues to grow to an average of about $43,000 by their tenth anniversary. Just being married, the study found, increases wealth about 4 percent annually, with all other factors held constant.

Wealth begins declining about four years before divorce, with total wealth bottoming out at an average of $3,500 the year before divorce.

“Many of these people may have separated before the divorce became official, which would help explain why wealth starts falling so early,” Zagorsky says. “Some people may also be working less and not trying as hard to build wealth as they have marriage troubles. Divorce is often a long and messy process, and you can see this in the four-year decline in wealth.”

Although the study indicates that in absolute dollars divorce is not significantly harder on women than men, it also reveals that the effects are long lasting. Wealth does begin to rebuild after divorce, but not by much.

“Even a decade after divorce, the median wealth stays below $10,000,” says Zagorsky.

The data does can’t explain why marriage is so helpful to wealth-building. Sociologists hypothesize that the fact that two people can live more cheaply than singles and have someone to share household responsibilities with may play a factor. Of course, people going through a divorce have a number of expenses associated with that, which may partially explain the drop in wealth.

“We cant’ tell from these data the reasons why divorced people have so much less wealth than those who are married,” Zagorsky states, “but the results are clear.”