The number of Americans getting a divorce has risen over the last three years. In 2012, about 2.4 million Americans filed for divorce. Divorce has a social and emotion impact, but there are also broad economic effects. Divorce contributes to the formation of households, increasing the demand for housing, appliances, and overall spurring the economy. It is also encouraging women to enter the labor force.
The increase in divorces has led to an increase in household formation. In the past four years, about 5.3 million households have been formed. There has been a great demand for condos, apartments, and furnishing. When divorce occurs, it often results in an increase in demand for housing by creating two households.
The increase in divorce did not occur until after the recession. During the recession, many couples chose to stay together. Either because their homes were underwater or one or both were unemployed. Before the recession, it is the home of a married couple that contains their largest assets to divide. When the recession hit, the value of housing decreased and a married couples assets shrunk. The recession itself caused great financial losses, divorce would just add to this loss.
http://www.businessweek.com/news/2014-02-18/worsening-u-dot-s-dot-divorce-rate-points-to-improving-economy
3 comments:
It is interesting how I recently read an article saying that economic recession causes an increase in divorce rate and it is an irony how divorce actually improves economy again. Also, there is an increasing number of people who decide to remain single and perhaps, this will improve economy as well.
It is all very interesting, and the article makes a compelling case for higher divorce rates pointing to a strengthening economy. It is interesting how this very emotional component of our society has a notable impact on our economy as well.
I was most intrigued that they merely said that these trends coincided: "The rise in divorces has coincided with an increase in household formation. " I thought that maybe they would try to prove correlation. But, it seems like a very intertwined cyclical system.
Post a Comment