The study of the month is Jay Zagorsky’s “Marriage and divorce’s impact on wealth” in the Australian publication the Journal of Sociology. Zagorsky, an Ohio State sociologist, followed young Baby Boomers from youth to their 40s through the National Longitudinal Survey of Youth. Zagorsky found that on average, a couple’s net wealth increases 16% for each year they stay married. By their mid-40s, marrieds will have 77% more wealth per person than singles will. The divorced are even worse off, losing 3/4ths of their net worth. And that is only the size of the gap at 50, the limit of the NLSY79 data. Since the great majority of those couples will stay married and keep working, the gap at retirement should be even greater.
Zagorsky focuses on simple economies of scale – one household is cheaper than two. But sociologist David Popenoe, director of the National Marriage Project, points to a more powerful factor: married people work more and work harder because they are working for something greater than themselves. Zagorsky found that divorced people started losing wealth four years before the divorce. He speculates that they were already separated and keeping two households. I think, though, that Popenoe is pointing to the greater factor: people who are committed to a marriage work harder and longer because they are building up something greater. It is reasonable to think that people who eventually divorce start hedging their bets about investing in the marriage years before the final breakup.
Zagorsky’s reported results do not take into account what I think will prove to be the greatest factor in why married couples need to produce more wealth and produce it faster: they have kids to support. That is the next study we need: married parents vs. unmarried parents, looking at how much they make, and how much net wealth they end up with.