Marriage can provide evident economic benefits to both parties, such as the division of labor within a family. Divorce, on the other hand, can be costly if the spouses do not have any previously agreed upon terms of separation. The economics of marriage and divorce are complex as they are influenced by factors such as demographics, social status, attitudes toward children in society, and others. This paper will examine the economics of marriage and divorce, specifically relating to Canada.
Marriage has a set of monetary and non-monetary costs and benefits that both partners consider before entering such a union. From a monetary viewpoint, marriage affects the wealth and assets of the spouses. According to Livingston (2022), a 2005 research from The Ohio State University shows that people’s wealth increased dramatically after they married. Couples reported an average net worth of almost $43,000 after 10 years of marriage, compared to $11,000 for single people (Livingston, 2022). However, people who had married and subsequently divorced fared the worst of all groups. The average divorced man had assets worth $8,500, whereas the typical divorced woman had only $3,400 (Livingston, 2022). It is important to note that the financial well-being of the spouses depends on factors such as children, having a mortgage, and the jobs that the partners have. Moreover, the policy implication from this statistic is the need to help families not reach the point of divorce as this affects the financial situation negatively.
Generally, in a marriage, a typical behavior is that some of the responsibilities of family care, such as preparation of meals or childcare, are delegated to one of the spouses. Over the years, the labor force participation of women has been increasing, both due to the increasing wages for women and the expansion of female rights (McKenzie & Tullock, 2012). As a result, the responsibilities that were typically delegated to wives are now either delegated to third parties or performed by men (McKenzie & Tullock, 2012). For example, the higher wage of a woman is correlated with the fewer homecooked meals in the household, which are typically substituted with restaurant meals (McKenzie & Tullock, 2012). Thus, the typical economic benefits of marriage have changed due to the evolving nature of the workforce; however, marriage still has some monetary and non-monetary benefits for the partners. The new policies targeting marriage should consider this change in women’s priorities to encourage families to cook at home.
Married couples might save money by splitting home bills and responsibilities. Couples also have various benefits over single individuals when it comes to insurance, pensions, and taxes. However, there are certain financial implications to getting married. Weddings, for example, are a significant financial outlay for many couples (Livingston, 2022). Furthermore, tax regulations that benefit certain couples penalize others. Finally, there is always the possibility that a marriage could end in divorce, which is one of the most significant financial losses one can have.
Prior to getting married, people search for a suitable mate and consider the potential benefits of a union, both financial and non-financial. This decision is affected by the supply and demand of the mating market. The level of competition will be determined by the number of men and women in the market, their disparities in individual preferences and searching ability, and societal restraints. The supply and demand in the dating market drive people to work, study, and even relocate in quest of better opportunities. Because of their lower reproductive capacity, women are more prone to adopt a selective mating strategy. Men are less picky, but they must compete among themselves to grow their resources relative to other males in order to increase their chances of access to women (McKenzie & Tullock, 2012). They may be more motivated than women to strive for higher-paying positions with higher social and corporate standing, as one example of behavior. Moreover, the ratio of men and women also affects the competition and choices of individuals. For example, if there are more women, men can use the scarcity of power in the marriage market. In some states, such as China, the one-child policies make it preferable for families to have boys over girls, which affects the ratio of men and women (McKenzie & Tullock, 2012). Therefore, women in this country are in a less favorable position when looking for a spouse as opposed to men.
In Canada, the statistics on marriages and divorces show that young people choose to marry at an older age and are less likely to file for divorce when compared to previous generations. Vanier (2022) prepared a statistic shown in Figure 1, which suggests that there have been fewer divorces between 2000 and 2020. Divorce statistics are essential because they can give unique insights into areas central to family life, including fertility, accumulation of wealth, property, and caregiving — many of which can have an influence on household well-being. The data does not provide a whole picture since 21 percent of partner relationships in 2016 were common-law – a proportion that is increasing and considerably higher in some regions of the country (Vanier, 2022). This example of behavior suggests that many young people nowadays choose to live in a partnership outside a marriage. The breakdown of these partnerships, as well as the separations of married couples, are not included in divorce statistics. Still, these statistics may suggest that from an economic viewpoint, marriage has become a better option, or spouses have begun to choose their partners more carefully, which affected the declining rates of divorce.
The cost of divorce is one reason why spouses may choose to postpone the breakup of their relationship. The cost of divorce also affects the rate of marriages and the frequency of informal partnerships that people choose (McKenzie & Tullock, 2012). Prior to getting married, the spouses consider the cost of divorce, and the difficulty of obtaining a divorce will affect the resources one is willing to spend on obtaining a mate (McKenzie & Tullock, 2012). These resources may be the costs of living together as a trial or the cost of prolonged dating. This divorce cost is also affected by the marriage and divorce laws in a particular country and any additional agreements between the partners. When divorce gets simpler, the proportion of legally married people may actually grow due to the impact on search expenses and marriage age. Furthermore, the impacts of different divorce laws indicate that the more expensive the divorce procedure, the lower the proportion of women married (Harford, 2009; McKenzie & Tullock, 2012). Individuals tend to suffer lower search expenses the smoother the divorce, which may be reflected in people marrying at a younger age. Thus, marriage and divorce are affected by the economic considerations of the couples.
In summary, marriage and divorce economics are complicated since they are impacted by factors such as demography, socioeconomic position, societal views toward children, and others. Marriage can bring obvious economic benefits to both sides, such as family division of work. Divorce, on the other hand, might be pricey if the parties did not previously agree on separation conditions. Marriage and divorce data in Canada reveal that young people prefer to marry later in life and are less likely to divorce. Divorce data are useful because they can shed light on elements of family life such as fertility, money accumulation, land ownership, and childcare.
References
Harford, T. (2009). The logic of life. Abacus Software.
Livingston, A. (2022). Financial benefits of marriage vs. being single – What’s better? Money Crashers. Web.
McKenzie, R. B. & Tullock, G. (2012). The new world of economics: A remake of a classic for new generations of economics students (6th ed.). Sprinkler.
The Vanier. (2022). Divorce in Canada: A tale of two trends. Web.