Women take a financial hit when they get divorced, and many don't recover

April 3, 2021

Women tend to take a financial hit after divorce. (Unsplash/Sharon McCutcheon)

Most women's economic well-being is negatively affected after getting divorced, but women with children are more likely to financially recuperate than childless women, according to new research that took the first comprehensive look at how family size affects the economic gaps created by divorce. 

The new study, published in Social Science Research, used the data of 13,399 divorced women ages 18 to 30, sourced from the U.S. Panel Study of Income Dynamic; the British Household Panel Study; the German Socio-Economic Panel Study; and the Household, Income and Labour Dynamics in Australia Survey to estimate the changes in the household incomes of mothers and childless women up to six years following a divorce. Households with children were also further stratified to look at mothers with one child, two children, or three or more children. 

"There's an academic debate that has a broader social relevance on whether divorce represents a crisis event or a chronic struggle," said Zachary Van Winkle, an assistant professor of sociology at the University of Oxford. "If it's a crisis that's only experienced for one or two years, then it's easier for social policy to mitigate those short-term effects, but if it's really a chronic ordeal for women, then it's important for social scientists and policymakers to know about that."

The countries included in the study had different levels of economic well-being for women prior to divorce, but in all cases, the women suffered economic losses following divorce. In the first year following a divorce, the incomes of both mothers and women without children dropped by about 60%. Mothers, however, started with incomes that were 20% lower than childless women because they were less likely to work full time while married. 

That meant that when it came time to enter the workforce as newly divorced women, mothers had more room to grow their earnings to the same levels as childless women. They also may have been further incentivized to work because they had more dependents, according to Van Winkle.

"It was somewhat surprising to see that women with many children were more likely to recuperate, but following divorce, women increase their labor market participation quite a bit so it's, of course, more difficult to increase your participation if you're already working full time, as many childless women do," he said.

Women earn an average of 84% of what men make, according to the United Nations, and divorce has been shown to decrease women's household incomes and increase their risk of poverty. Women are also more likely to retain custody of children after a divorce, and the likelihood of financial hardship is only increased when there are more people in the home to care for — though mothers are better able to financially recover from divorce than childless women.

Immediately following divorce, the dip in household income is similar for childless women and mothers with one or two children. For mothers with three or more children, income fell by 70%, leading to a marked difference in the poverty experienced by women with more children. These women do see a modest recuperation, from approximately 70% to 65%, relative to one year before their divorces. Childless women, however, typically have stagnant incomes for years after they divorce. 

The research showed that while childless women's incomes don't recover six years after divorce, women and children were more likely to recover in countries with greater social safety nets, such as Australia, which Van Winkle noted has "more generous income transfers than a lot of liberal countries like the U.S. and U.K."

The difference in income loss between mothers and childless women in the United States and other countries is stark. Childless women's incomes decreased by about 40% in Germany and 60% in the U.K., whereas mothers' incomes decreased by at least 20 percentage points more. The loss in income is similar for both groups of women in the United States, but American women are less likely to recover after six years than are women in either nation. In Germany, women experience a 60% drop in income after divorce but recover to only a 40% drop within six years; in the U.K., women see an 80% drop in income that recovers to a 30% shortfall within six years; and in Australia, income recovers from 60% to 40% of predivorce levels within six years.

The lack of previous research on the role that household size plays on women's economic welfare following divorce was surprising to Van Winkle, who said he pursued the topic because of the clear social problems involved: Mothers facing economic hardship are more likely to have children who face health problems, reduced educational and occupational attainment, and more. 

"It's important to know that larger families are more vulnerable to the economic consequences of divorce and that means that more children are being exposed to severe economic consequences than what we'd expect," Van Winkle said. 

The study "Family size and economic wellbeing following divorce: The United States in comparative perspective," published March 15 in Social Science Research, was authored by Zachary Van Winkle, University of Oxford; and Thomas Leopold, University of Cologne.

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