Thus, we’ll assume, for simplicity, 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 a 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 J. Marcus is an economist, writer and speaker formerly with the Kelley School of Business at Indiana University. He can be reached at firstname.lastname@example.org.