Splitting up drops wealth by 77%

USA Today (Society for the Advancement of Education), April, 2006

Divorce reduces a person's wealth by 77% compared to that of a single person, while being married increases comparative wealth by 93%. Moreover, people who get divorced see their wealth begin to drop long before the decree becomes final, maintains research scientist Jay Zagorsky of Ohio State University, Columbus.

"Divorce causes a decrease in wealth that is larger than just splitting a couple's assets in half," he asserts. By the same token, married people see an increase in wealth that is more than just adding the assets of two single people. "If you really want to increase your wealth, get married and stay married. On the other hand, divorce can devastate your wealth," Zagorsky emphasizes.

Contrary to popular belief, however, the results of Zagorsky's study show that the wealth status of divorced women is not significantly worse than that of divorced men, in terms of real money. After divorce, the typical man holds 2.5 times the amount of wealth of a typical woman. While this seems large in percentage terms, the difference in absolute dollars is relatively small--about $5,100.

The data does not indicate why marriage is so helpful in building wealth and why divorce is so devastating, Zagorsky claims, but sociological research offers some potential clues: Married people can benefit because two people can live more cheaply than they could separately. In addition, since two spouses can share household responsibilities, they each can produce more than if they were single.