Monday, March 06, 2006

The Bonfire of the Assets

Married people accumulate wealth. Married men, especially married fathers, work harder and save more. Waite and Gallagher, in The Case for Marriage, report that marriage is like a 12% annuity. Each year spent unmarried in adulthood decreases your likely total wealth by 3.5%. Married people build wealth better that singles or cohabiters.

Widows and divorced people lose wealth over time. Divorced men stop working harder, as a rule, once they get divorced. Divorced women are likely to end up with 1/3 less wealth than they would have if they had remained married.

Most American families show an upward trajectory in wealth, in class, and in status. Pick just about any American family: if they have even three generations of solid marriages and at least as much education as their predecessors, the youngest generation will be wealthier.

Divorce stops that upward trajectory. Divorce usually means running two households on the same income that used to support one. Moreover, assets are typically lost, split, even destroyed along with the marriage. In the typical case, he will live less well than he did before, materially and socially. She will make a household with the kids that has much less income per capita than they had before, and is not likely to generate wealth for a long time, if ever. If the family started out working class, they are likely to end up poor. This is most of what the "feminization of poverty" means.

If the mom has kids without any marriage at all, the downward financial spiral is likely to begin at day one, before there are any assets to burn.

Look at any extended family tree, and compare the branches. The one with the most enduring marriages is likely to be the richest.


Paul M. said...

Ain't it a shame that the mercenary considerations you (rightly) illuminate are more likely to motivate right behavior than, say, spiritual factors?

Gruntled said...

The money is the gravy. Gravy is good, but isn' the main meal.