Divorcing our way to prosperity

Matthew Yglesias had a funny post recently about how the backlog of divorces, births and young people waiting to move out from the parents’ homes is holding back the economy. It’s true, strictly speaking. But no one really wants more divorces just to stimulate the economy, right? That would be as crazy as wanting more marriages just to stimulate the economy — which must be crazy, because it’s exactly what Brad Wilcox has advocated (hopefully just to see if his deep-pockets corporate sponsors are paying attention to what he does with their slush funds).

All that is why it was funny to see the Wilcoxian Elizabeth Marquardt take offense at the Yglesias piece. “Sure, America, get divorced and go shopping,” she huffed. “A divorced household means two refridgerators rather than one, and what could be better for the economy?” Of course, waste is consumption, and consumption is a good way to get out of a recession. As Yglesias put it:

 There are millions of “missing” households in America that can appear—through childbirth, divorce, or moving out—very suddenly if people get a bit more in their pockets.

Put another way, all those divorces waiting to happen are really shovel-ready households, ready to be formed. But what kind of moral view of the family is that?

Seriously, I have to put my foot down on this. I don’t want either divorces or marriages just because one or the other stimulates more shopping — even if it means shopping for cool new beds:

That image is from a post by Mike Konczal, who believes the recession is reducing divorces. His data is a little old. I’ve done quite a bit on this issue, and my latest leaning is in the direction of the recession creating a backlog of divorces that may already be showing themselves, with an uptick in the number of couples reporting divorce in the 2010 American Community Survey and Google divorce searches trending upward.

When the economy improves — and more new households are formed, by people moving out, for better or for worse — the improvement will be good news, and the boom in broken marriages will be good or bad depending on whether they were good or bad divorces, not because they are good or bad for “the economy.”

14 Comments

Filed under In the news

14 responses to “Divorcing our way to prosperity

  1. Ness Blackbird

    I don’t agree with your economics, anyhow. People buying otherwise unnecessary goods is not a net gain for the economy, at least in the case of normal people who will have to cut back on something else. The question is whether the people become more economically productive as a result of divorce, which certainly could happen, at least in the case of people forced to work more.

    • Two ways I think new households can be an economic multiplier: first is just getting people to spend instead of (shudder) saving. That’s short-term stimulation. Second is getting people to buy durables (like refrigerators) instead of candy bars. I could be wrong, tho.

    • mike3550

      Ness — “unnecessary” is really in the eye of the beholder. Having two houses (with refrigerators, dryers, ranges, food, etc.) may be “unnecessary” if we take the premise that divorce leads to households that shouldn’t be necessary. However, if the marginal happiness of the couple is improved by creating two separate households, then that seems to be a net gain for the economy, social good, and likely productiveness.

  2. mike3550

    It seems like you can get some traction on the idea of a backlog of divorces by looking at state-level variation in the consequences of the recession and number/rate of divorces. Since states vary substantially in how hard they were hit by the recession and how quickly they recovered, you might be able to leverage that to see if there is a difference relative to state-level differences before the recession to estimate this effect (similar to excess mortality studies in public health). It is a fascinating question.

    • Great minds think alike, mike3550. I have a paper that does this with the state unemployment and foreclosure rates. I will be presenting it at the Population Association of America this spring, but a draft of the paper is available online now: http://paa2012.princeton.edu/download.aspx?submissionId=120797. The short answer: “Results show a robust decline in divorce from 2008 to 2009. However, higher state unemployment is associated with increased odds of divorce.” Hopefully before the conference I will have incorporated the 2010 data.

      • krippendorf

        Haven’t read the paper (yet), but it seems like you’d want to adjust for geographic mobility and its associated selection effects — couples that move to a low unemployment state likely differ in ways related to the probability of later divorce from couples that stay in a high unemployment state — and stressors on marriages. But, maybe you did already.

      • mike3550

        I look forward to reading your paper!

  3. Paula Fomby

    What happened to the stuff that was briefly posted about Charles Murray’s new book?

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