Other Halves getting by on Half

A report released today from NATSEM should be pre-nuptial reading for intending couples. It studies the circumstances of couples who divorced over the past 10 years. On economic grounds it?s not a good value proposition. Women end up asset rich (they generally get the house and kids) and income poor (42% lower or $21,400pa lower). Men end up with a smaller reduction in income (8% or $4,100pa) but acquire higher debt. If you combine these statistics you have a couple living separately with $25,500 pa less income and more debt.

An it?s not just young people who get divorced. With greater longevity and too-early retirement putting boredom pressure on relationships, it?s likely to afflict old as well as young. An indication of economics of single and couple-living is the age pension where the single rate is 60% of the married rate ? i.e. the government is saying it costs 20% more for two to live separately than as a couple.

Current statistics are for 1 in 5 marriages to end in divorce within 10 years and 1 in 3 to end within 20 years. If you overlay these statistics with current mortgages to finance houses priced at 8 times average wages now versus 4.7 times 10 years ago, the next 10 years will produce some tough times for divorcees. Investing in some regular counselling while the relationship is healthy looks a sound economic proposition.

The NATSEM report can be accessed at http://www.natsem.canberra.edu.au/publication.jsp?titleID=OP0501

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