How do women and men really fare financially when a marriage breaks down?
A new Life Course Centre Working Paper takes a broader and longer-term view of wealth changes for women and men across the marital dissolution process.
While previous research has linked marriage breakdown to a decline in income for women, there has been less attention on wider personal wealth as a measure of economic wellbeing. This can include costs – such as division of property at divorce, moving out of the marital home and into a new home, and legal expenses – which can vary depending on the stages of dissolution. Research to date has focused on either separation (split of a marital household into two single households) or divorce (legal termination of marriage). It is therefore unclear at what points of the process do men and women lose wealth.
The Life Course Centre Working Paper, ‘Marital Dissolution and Personal Wealth: Examining Gendered Trends across the Dissolution Process’, addresses this by examining wealth changes starting up to three years prior to separation until 15 years after legal divorce. The paper uses German panel data to investigate the wealth of men and women that had a marital dissolution between 2002 and 2017. It also splits overall personal wealth into a housing wealth component and more liquid financial wealth.
The results show both men and women lose most of their wealth during separation, whereas the legal divorce does not lead to any additional wealth penalties. The separation penalty is mainly driven by declines in housing wealth. Financial wealth, as a smaller but more liquid aspect of overall wealth, already declined prior to separation. Wealth levels did not improve in the short-term after divorce for either men or women.
Overall, these findings demonstrate that both men and women experience critical wealth declines across the dissolution process, although men still hold more wealth than women at any time – emphasizing the stronger vulnerability of women’s economic wellbeing.
This Working Paper was published by Life Course Centre PhD student Nicole Kapelle in conjunction with Life Course Centre Director Professor Janeen Baxter of the Institute for Social Science Research (ISSR) at The University of Queensland (UQ). Nicole is currently a Research Associate at the Department of Social Sciences at Humboldt-Universität zu Berlin and a PhD candidate at UQ’s ISSR. Her research interests include family dynamics over the life course, wealth inequalities and gendered economic consequences of marital dissolution.
Read the full Working Paper here.