Marital Histories and Economic Well-Being



Compared to unmarried individuals married individuals report greater average wealth. A restricted focus on current marital status risks misrepresenting the effects of marriage on wealth, as an increasing proportion of older adults have been divorced and remarried, having lived through the dramatic upheavals in family structure from the 1960s through the 1980s. To shed light on the associations between a lifetime of marriage events and wealth near retirement, we used panel data from the Health and Retirement Study and developed categories of marital experiences that acknowledged current status, type, number and date of past marital disruptions and total duration of time spent married across the lifespan. We found that the route individuals took to get to their current marital status were important predictors of wealth levels near retirement and were different for males and females. Observable differences in lifetime earnings, mortality risk, risk aversion, other characteristics such as education and number of children, explained much of the wealth difference between married and remarried individuals however neither observable characteristics nor sources of other wealth from pensions and Social Security were enough to explain the large differences in wealth accumulation between single and married women and individuals experiencing more than one marital disruption. Given the higher divorce rate, prevalence of multiple divorces and earlier age of divorce of the Baby Boomer cohort compared to earlier cohorts, an understanding of how marriage disruptions over the lifecycle impact savings is increasingly important for understanding the economic security of retirees.

Key Findings

  • Less than half of HRS respondents have one continuous marriage throughout their lives. Younger cohorts are more likely to have one or more divorces, to experience them at younger ages, and are less likely to remarry.
  • We find no wealth differences between continuously married couples and those remarried after one disruption. However, remarried people with two or more disruptions have lower wealth than continuously married couples.
  • After accounting for many possible explanations, we find that single women have lower wealth than continuously married women. One explanation could be financial literacy, which is the lowest for divorced women. Among college educated women, never married were more likely to answer a financial literacy question correctly than divorced women, who may not have invested in understanding complex financial decisions while married.

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Paper ID

WP 2008-180

Publication Type

Working Paper

Publication Year