February 18, 2014
How Divorce Affects Women’s Earnings
In the aftermath of the women’s movement of the 1960s and 1970s, the incidence of divorce climbed, peaking around 1980.
Millions of women were suddenly on their own at a time when women were still having to prove themselves to many employers. But I remember being impressed by a college friend’s mother whose divorce wasn’t the disaster her family feared: she marched into a high-profile non-profit in Chicago and landed an impressive job.
It’s been well established in academic research that women often face financial struggles after divorce. Married women are typically better off, since couples can live more cheaply and since two incomes are better than one.
But a new long-term study of women who divorced during the mid-1970s indicates there were “positive effects of marital dissolution:” higher earnings.
The study, which compared data on married and divorced women’s long-term earnings, finds that the average earnings of those who divorced increased by $4,361 in the first year after the divorce. This represented a 40 percent increase in their average annual earnings one year prior to the dissolution. And for those who did not remarry, their earnings continued to rise for about two decades relative to married women.
This positive effect of divorce – higher earnings – was “more sustained over the life course than previously recognized, lasting more than two decades,” the authors conclude in a chapter on the financial impact of divorce in their book, “Life Cycle Events and Their Consequences.”
Today, the women who came of age in the 1960s and 1970s are approaching retirement, and they’re being reminded of the disadvantages of going it alone.
The Social Security benefits of divorced women who never remarried are about $911 per month. But the combined household benefits of married couple households – about $2,231 per month – are significantly higher, the study found.
Full disclosure: The research cited in this post was in part conducted by the U.S. Social Security Administration (SSA). The opinions and conclusions expressed are solely those of the blog’s author and do not represent the opinions or policy of SSA or any agency of the federal government