Divorces Fell in 2020. NewsWire

NewsWire: 4/8/21

• The number of divorces has fallen over the past 12 months in multiple states, including California and Florida. Amid the uncertainty of the pandemic, some couples ready to split up are deciding to stay together for financial reasons. (The New York Times)
• NH: New data from select cities and states show that the number of divorces fell in 2020. In Los Angeles, divorces were down -17.3% YoY. And of the five states that provide monthly data, all but one reported a YoY decline. 
• A paper from Bowling Green State University used the state data to create national estimates. The researchers predict there were up to 190,000 fewer divorces in 2020.
• This drop isn’t a surprise. The number of divorces typically falls during a recession. In 2009, for example, the number of divorces per married woman fell -6.7% from the year prior. During the Great Depression, divorces fell an estimated -25% from 1929 to 1933.
• Researchers usually explain this decline by pointing out that, when economic uncertainty rises, couples considering divorce will often postpone it until they can afford to live apart. Although it's true that a sudden drop in income can push some couples into divorce, it's precisely those couples who are compelled to wait until they can separate. After recessions end, the divorce rate usually rebounds.
• Longer term--over the last three or four decades--the trend in the annual number of US divorces has been downward. From 1981 to 2019, the number plummeted by nearly -40% (from 1.2M to 750K), despite the fact that the US population rose by +43%. The most obvious reason is that fewer people are now getting married, and therefore there are fewer marriages to break up.
• Yet even if you look only at the divorce rate (that is, divorces per 1,000 married people), this too has been falling over time. The reason is a shifting composition effect. Back during the American High, pretty much everyone felt pressured to get married--so nearly everyone did. More recently, people who are less likely to stay married are much less likely to get married in the first place. On the other hand, those who do get married tend to be older, more educated, more affluent, and more emotionally stable--which means their marriages are more likely to survive over time. (See “Millennials Turn to Prenups.”)
• As a result of this self-sorting, Xer and Millennial marriages are lasting longer. The divorce rate--which had been rising steeply before about 1980--has since been in decline.
• Whether most Americans are happier as a result is really hard to say, since many younger Americans who chose not to marry might have been happier if they had. Marriage itself is highly correlated with everything from better health and longer lives to greater life satisfaction and community engagement. That may be because happy people get married. But then again it may also be because marriage itself generates happiness. The direction of causality probably runs both ways. 
• In any case, the final 2020 data will probably show a steeper-than-average divorce decline. Then, when the economy rebounds, expect an uptick in terminated marriages.