Written By:
Divorce.com Staff
The Complete Guide to Inflation and Divorce
For most Americans, divorce has always been an economic decision—at least in part. Our Divorce Index™ shows that today’s economy—with inflation spurring rising costs across the board—could be driving the divorce rate down.
Divorce rates are dropping as inflation rates rise. Does that mean rising inflation is increasing marital bliss? Probably not. The Divorce.com data indicates that today’s economy are likely what’s driving the divorce rate down.
“Most people think of divorce as purely a relationship issue. But for most Americans, it’s also an economic issue,” said Laura Wasser, family law expert and Chief of Divorce Evolution at Divorce.com. “Getting divorced increases expenses for both spouses. It can mean two homes, two electric bills, and two sets of household expenses. Add in children, and the expenses can skyrocket in the form of increased childcare expenses or child and spousal support payments.”
The Price of Divorce
The divorce process itself poses significant expense. An uncontested divorce averages $4,100, but disputes over issues like child support or alimony can boost that price in a big way. A divorce that goes to trial for two or more contention points averages $23,300. If any other outstanding issues need resolution in the courts, or if there are complex assets to untangle, the legal bills alone can soar by tens of thousands of dollars more.
"When money gets tight, even listless relationships are less likely to end,” said Wasser. “Bottom line? Many Americans simply can't afford to call it quits."
Divorce Index™—Key Takeaway
The team from Divorce.com assists more couples filing for divorce in the United States than anyone else, and its online system launched the online divorce industry. Our Divorce Index™ draws on decades of proprietary information to measure a broad spectrum of divorce-related data, including Americans' interest in seeking marriage dissolution across time and geography.
Research across our systems indicates that rising inflation is driving the divorce rate down.
"We analyzed how the recent spike in inflation affected divorce interest, leaning on data from Divorce.com and its Divorce Index," Wasser explains. "The data shows Americans' recent interest in filing for divorce peaked in March 2021."
Impact of the American Rescue Plan on Divorce Rates
A contributing factor to this March 2021 peak could be the influx of federal cash into the hands of Americans during the height of the COVID-19 pandemic. US President Joe Biden and the 117th Congress on March 11, 2021 enacted the $1.9 trillion American Rescue Plan Act. Among other financial incentives, this economic stimulus included recovery rebates of $1,400 for individuals and $2,800 for joint taxpayers, and $1,400 for each taxpayer’s dependent (limited by the adjusted gross income of the taxpayer). The intent was to pull the country out of a COVID-induced economic downturn
This “money in the bank” and hope for a recovering economy might have given people the financial confidence to move forward with divorce. Our Divorce Index™ supports this assumption, indicating that couples’ interest for ending their marriages in March 2021 was up 84% from March of the prior year.
Inflation’s Impact on Divorce Interest
As many of us are painfully aware, in 2022, America saw inflation spike, peaking in June 2022 at 9.1%. As such, Americans likely sought to delay significant expenses in the face of rising gas, food, and housing prices. Indeed, our Divorce Index™ shows a 40.6% decline in divorce interest concurrent with the peak inflation. While inflation has moderated slightly in recent weeks—ending with an 8.5% in July 2022—Americans' interest in divorce has remained off 2021 peaks.
Laura’s Final Thought
"There’s a big difference between correlation and causation," said Wasser. "But what we see in our data begs the question: Is the economy keeping people from divorcing? If so, we should be looking even closer at ways to ease the financial burden on divorcing couples."
About Laura Wasser
For over a decade, Laura Wasser has been changing the face of divorce. Laura is a renowned celebrity divorce lawyer, family law expert, author, entrepreneur, and Chief of Divorce Evolution at Divorce.com. She is the author of the New York Times bestseller, It Doesn’t Have to Be That Way: How to Divorce Without Destroying Your Family and Bankrupting Yourself.
Despite her acclaim as a “divorce lawyer-to-the stars,” Laura has made it her driving purpose to help real people divorce through less combative, modern solutions with
Divorce.com. She also maintains a robust family law practice as a managing partner at Wasser, Cooperman & Mandles.
