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Column: Marriage, divorce stimulate economy

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Two good things happened last week: First, we survived another commercial blitz for Valentine’s Day. Second, fear of the public’s good sense caused the Indiana General Assembly to abandon its most recent anti-gay crusade.

Now we can consider marriage and divorce, two important activities often neglected in economic analysis.

The data we have are not necessarily clear. In Indiana, for 2009, the U.S. Bureau of the Census reports 49,212 males and 49,484 females married. On the surface, this suggests some slight degree of bigamy or lesbian relationships.

But fear not. The disparity arises from how the data are collected. The American Community Survey is used and the sample taken is pumped up to full population size. The sampling variability is reported in Appendix 3, which no one bothers to read.

We’ll compromise and say there were 49,300 marriages of the legal sort in Indiana. The survey also reports approximately 27,700 divorces in the state. These numbers lead to the mistaken statement heard so often that most Americans believe its truth: more than half of all marriages end in divorce.

No. That is wrong and promoted by those who would have you believe that marriage itself is on the rocks in Indiana and the U.S.

The U.S. National Center for Health Statistics reports 52,900 marriages in Indiana for 2009. That’s only 7 percent higher than our American Community Survey marriage estimate and probably more accurate since it is based on recorded marriage certificates sent in by each state.

However, as far as the world knows, there were an unknown number of Hoosier divorces in 2009. Indiana is one of five states that does not report divorces to the federal government. Why? To the best of my knowledge, Indiana maintains no public count of divorces. There are county court records, but no summary statistics.

Thus, we’ll assume, for simpli-city, each year we have 50,000 marriages and half as many divorces in the state. What is the divorce rate?

50 percent? No. Each year, in this example, 25,000 couples are added to the still-married pile. The annual number of divorces should be compared to the number of married couples in the state. Thus, if Indiana had 1.2 million husband-wife households in 2009, 25,000 divorces would be a divorce rate of 2 percent.

Marriage between two adults will reduce the number of households (unless they have been living with their parents or other roommates). While “two may live as cheaply as one,” experience has proven there will be substantial material accumulation and expansion of living space.

Divorce will increase the number of households, at least temporarily. Once again there tends to be some material accumulation and an increase in living space, constrained, as ever, by income.

Marriage and divorce are important economic events. As with births and deaths, they stimulate economic activity.

Perhaps someday, some enlightened public servant will encourage legislation to record and report divorces in Indiana. It might be as important as alcohol at the State Fair.

Morton Marcus is an economist, formerly with the Indiana University Kelley School of Business. Send comments to letters@dailyjournal.net.

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