Husbands lose twice as much income as wives after divorce

HUSBANDS lose twice as much income as their wives when they divorce, according to research published by America’s central bank.

Analysis by the Federal Reserve Bank of St Louis showed divorce was costly for both men and women, with US couples who split up over the past year seeing an average reduction in income of 12 per cent compared with those who stayed together. However, researchers discovered a marked difference between the sexes, with men’s incomes fall 17 per cent on average, while women experienced an average decline of 9 per cent.

Guillaume Vandenbroucke, a Fed economist, said there was a clear “earnings penalty for divorce, particularly among men”, adding that the differences were not due to spousal or child maintenance payments because only wages and salaries were measured.

He added: “This difference between men and women is most visible in their 30s, during which men lose close to 40 per cent of their income following a divorce, while women lose noticeably less”.

Researchers also found that women who divorce in the years before retire

mentlost almost 60 per cent of their income.

Mr Vandenbroucke said it was unclear why divorce affected individuals’ earnings as well as their wealth. He added: “It is customary to consider the effect of divorce on expenses.

“Divorces impose new living arrangements on the affected parties and, hence, changes in housing expenditures. Divorces also matter for one’s tax status, health care spending, child care expenses. Divorces also have wealth effects since retirement accounts and other assets are often split between the parties. Yet, the data do not pertain to expenditures or wealth; they pertain to income. Why do recently divorced workers earn less than the others? One possibility is these individuals change their work patterns: they work fewer hours or they work [in] lower-paying jobs.”

Mr Vandenbroucke said it was not possible to draw conclusions about why the decline in male earnings was so marked after a divorce. However, Debora Price, a gerontologist and professor at Manchester University, said incomes and social status probably played a big role, particularly among young couples.

She said: “People who get divorced are usually from lower income groups. The research probably also tells us that men who get divorced in their 20s, especially, have low incomes. Financial stresses cause marriage breakdown and … it was men who had … low incomes, or experienced unemployment whose marriages were likely to break down.