Is Divorce Really Bad
November 25, 2008
ECON 429: Professor Horlacher
Increasing Divorce Rates
Beginning in the 1960’s - 200% increase in the
rate of divorce.
Results in a change of family structure.
By 1998, only 68% of children lived with two
parents. Now a minority.
What does this mean for children?
Family structure consequential on economic
earnings and well-being of a family.
Divorce correlated with an immediate decrease
in average family income by 41%.
- $60,296- two-parent family with kids
- $22,428- female-headed family
Demonstrated by a 16% decrease in
Initial Impacts on Children
Lower educational attainment: worse test
scores, higher dropout rates, and decreased
college entrance numbers.
Increased likelihood of being arrested.
Among females, increased chances of
becoming pregnant at a young age.
Disadvantage for the growth of human capital.
Long-Run Impacts on Children
Decreased economic potential:
-men from intact families- $20,769/yr
-men from divorced families- $17,721/yr
-women/intact - $16,148/yr
-women/divorced - $14,185
Tendency to put off marriage.
Increased likelihood of separation or
The Case of the Stepchild and
Children of Bereaved Families
1/2 of all children of divorce will eventually live with a
step-parent: two-adult household, minus biological
Most turmoil from the ‘relationship quality.’
Stepchild outcomes parallel those of divorced children:
better than with one parent, worse than with two
Bereaved children- do not demonstrate the negative
Bereavement means loss of a parent due to an
exogenous rather than an endogenous factor.
Lack of the presence of a biological parent.
Economic impact: decreased financial
Family class origination.
Resource impact: lower overall resources
to put into the child’s development.
Lack of Biological Parent
Kids need their biological parents.
Did not pan out with statistical evidence:
neither stepchildren nor children of bereaved
families, who both lose a biological parent,
experience the problems to the same extent.
A shift from two salaries to one means fewer
However, in the case of the step-child, there is
an added income, but the impacts persist.
Statistically, divorced families tend to come
from lower classes initially.
Family Class Origination
Trend: Families who go through divorce have a
higher tendency to be from lower classes.
Children born out of wedlock tend to come from
parents with lower education and with a higher
likelihood of being black.
On the other hand, two-parent families are correlated
with being white, male, and speaking English at
The disadvantages may come from sources outside
Overall Resource Impact
Single-parent families also have less time,
fewer role models of the opposite sex, and
smaller social networks.
Each parent has the ability to invest effort into
their child: ability decreases with constraints
that come from divorce.
Maybe explains stepchildren vs. bereaved
Making Divorce Easier
In 1970’s laws changed from multilateral to
Makes it easier on parents, same effects
seen in children.
Resulted in increased divorce rates.
Means more kids living in divorced families,
which correlates with negative impacts.
Ways to Help
Recoup lost finances: through remarriage or
increased labor participation.
Remarriage: the earlier the better, but never
fully fixes the issue.
Labor Participation: shows a correlation with a
lesser decrease in educational attainment.
Problems could be bigger still if families do not
attempt to work with the problem.
Divorce correlates with several negative
outcomes in children.
Public policy must attempt to alleviate the
Lightened-limits on welfare would aid single-
Increased policies mandating payment of child
Need to help parent’s disadvantages to help the