Published: July 21, 2020


Kapelle, N., & Baxter, J. (2019). Marital dissolution and personal wealth: Examining gendered trends across the dissolution process. Journal of Marriage and Family.

Authors:

Nicole Kapelle and Janeen Baxter


Abstract:

Objective

This study examined potentially gendered net worth changes over the marital dissolution process, starting up to 3 years prior to separation and continuing up to 15 years postdivorce.

Background

Incipient literature showed steep wealth declines for men and women associated with divorce, treating marital dissolution as a single point‐in‐time event. These findings may be limiting as legal regulations and divorce‐stress‐adjustment research conceptualize marital dissolution as a process that lasts several years.

Method

Using fixed effects regression models, we analyzed changes in personal net worth as well as changes in personal net housing worth and financial net worth of individuals whose marriages dissolved between 2002 and 2017. Analyses used comprehensive wealth data from the German Socio‐Economic Panel study.

Results

Although wealth declines commenced prior to separation, separation was the most critical point with 82% and 76% reductions in personal wealth of men and women, respectively. Divorce did not pose additional wealth penalties, but wealth was also not recovered in years after divorce. The lasting separation penalty was mainly driven by declines in housing wealth and a lack of financial wealth recovery. Overall, both men and women experienced dramatic relative wealth declines with negligible gender differences. Predicted wealth levels, however, indicated that men may be in a financially better position compared to women due to higher preseparation wealth levels.

Conclusion

Results illustrated important variations in personal wealth measures over the marital dissolution process, which may drive lasting wealth inequalities, particularly with regard to housing wealth for both men and women.