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Shifting fortunes in a changing economy: trends in the economic well-being of divorced women*

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Income losses resulting from marital disruption have traditionally contributed to high rates of poverty for single women. This paper explores trends in the economic consequences of divorce using data from the 1980-2001 Current Population Survey March Demographic Supplement. Divorce still adversely affects women’s incomes, but divorcées have achieved striking economic gains over the last twenty years. Newly developed econometric techniques reveal progress at all points of the income distribution; middle- and upper-class economic gains cannot be attributed to polarization within divorced women’s incomes. Multivariate analyses show that progress can largely be attributed to divorcées’ progress in the workforce and changing demographic attributes, rather than economic dependence on men, relatives, or income transfers. Finally, we explore the implications of these results for understanding stratification in contemporary America. gray literature
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Chapter 6
SHIFTING FORTUNES IN A CHANGING
ECONOMY
Trends in the Economic Well-Being of Divorced Women
Matthew McKeever1 and Nicholas H. Wolfinger2
1Department of Sociology and Anthropology, Mount Holyoke College, South Hadley,
Massachusetts; 2Department of Family and Consumer Studies, University of Utah, Salt Lake
City, Utah
Pp. 127-157 in Fragile Families and the Marriage Agenda, edited by L. Kowaleski-Jones an
d
N. H. Wolfinger. New York: Springer, 2005.
Abstract: Income losses resulting from marital disruption have traditionally contributed to
high rates of poverty for single women. This paper explores trends in the
economic consequences of divorce using data from the 1980-2001 Current
Population Survey March Demographic Supplement. Divorce still adversely
affects women’s incomes, but divorcées have achieved noticeable economic
gains over the last twenty years. Newly developed econometric techniques
reveal progress at all points of the income distribution; middle- and upper-
class economic gains cannot be attributed to polarization within divorced
women’s incomes. Multivariate analyses show that progress can largely be
attributed to divorcées’ progress in the workforce and changing demographic
attributes, rather than economic dependence on men, relatives, or income
transfers. Finally, we explore the implications of these results for
understanding stratification in contemporary America.
Key words: economic consequences of divorce, family structure, poverty, income
polarization
1. INTRODUCTION
Childhood poverty is one of the most pressing social problems facing the
United States, both today and for the foreseeable future. Thirty-seven
percent of the poor are under age eighteen, while 16% of all minors now live
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6
in poverty (Dalaker 2001). Economic deprivation while growing up has
been linked to poor physical health (Korenman and Miller 1997), reduced
intellectual ability and academic achievement (Duncan et al. 1998; Pagani et
al. 1997; Smith et al. 1997), premarital fertility (Duncan et al. 1998; Wu
1996) and various other psychosocial difficulties (Hanson et al. 1997;
McLoyd 1998).
One of the most important determinants of poverty in contemporary
America is family structure (Levy 1995). Poverty rates for single mothers
have traditionally been five times those of two-parent families (Garfinkel
and McLanahan 1986). Furthermore, changes in the structure of the
American family since 1960 have greatly contributed to higher rates of
childhood poverty. In the 1980s approximately 23% of the increase in
childhood poverty resulted from the proliferation of mother-headed families
(Eggebeen and Lichter 1991). This trend has led some researchers to label
single-mother families as the new underclass for the end of the 20th century
(Garfinkel and McLanahan 1986; Weitzman 1985).
Divorce is an important source of poverty among single-mother families.
Although divorce rates have stabilized since 1979 (Goldstein 1999; Raley
and Bumpass 2003; United States Bureau of the Census 2001a), about 50%
of all new marriages will probably dissolve (Bramlett and Mosher 2001;
Kreider and Fields 2001) and marital dissolution often takes a grievous toll
on women’s incomes (Holden and Smock 1991). This is particularly the
case for divorced women with children, who suffer greater declines in
standard of living (cf. Bianchi et al. 1999; Smock 1993, 1994). For these
reasons divorce is crucial to understanding poverty in contemporary
America. Family structure is now firmly entrenched with race, education,
and socioeconomic origins as stalwarts of stratification research.
In this paper we examine how divorced women’s incomes have changed
over the past twenty years. Newly developed statistical methods coupled
with data from the 1980-2001 Current Population Survey (CPS) allow
unprecedented insight into the economic consequences of divorce. Although
still poorer than their married counterparts, divorced women had much
higher incomes in 2001 than in 1980. This can largely be attributed to
growing levels of vocational capital in conjunction with declining family
size. Economic dependence on income transfers or other adults plays little
part in accounting for divorcées’ increasing incomes. We also shed light on
the changing distribution of incomes for divorced women. Marital
disruption has contributed extensively to income inequality. Poverty rates
would be lower if not for high divorce rates. However, we show that income
polarization has not occurred within the population of divorced women to
the same extent as it has for Americans as a whole. Instead, divorcées
6. Shifting Fortunes in a Changing Economy 3
throughout the income distribution have benefited from changing economic
conditions.
2. BACKGROUND
Political commentary on divorce is as old as divorce itself (Phillips
1991), and contemporary America is no exception. Recently the governors
of Arkansas and Oklahoma openly stated their desires to cut divorce rates in
their states by one-third to one-half (New York Times 2001). Covenant
marriage laws in Louisiana, Arizona, and Arkansas offer the option of
eschewing easy divorce for what amounts to fault-based statutes (Nock et al.
1999; Thompson and Wyatt 1999). Language urging the reconsideration of
no-fault divorce appeared in the 2000 Republican Platform (New York
Times 2000); in total, over thirty states entertained anti-divorce legislation in
the 1990s (Gardiner et al. 2002).
The reasoning behind this war against divorce goes beyond the desire for
a return to a ‘golden age’ of marriage. Many blame easy divorce laws for
the proliferation of poverty (Gallagher 1996; Galston 1996). According to
the opponents of divorce, preserving two-parent families would cut public
expenditures by reducing subsidies to indigent single mothers.
Sometimes the proponents of tougher divorce laws have drawn on
outdated or discredited research. Weitzman (1985), whose findings partially
motivated the Louisiana Covenant Marriage Act (see Spaht 1998), analyzed
228 respondents selected from Los Angeles County court dockets in 1977.
She reported that divorce lowered women’s standard of living, measured as
the ratio of income to needs, by 73%. Subsequently her results were found
to be erroneous (Peterson 1996). Concurrent studies withstanding scholarly
scrutiny show smaller but still noteworthy post-divorce declines in women’s
standard of living, generally in the neighborhood of 20-45% (Mott and
Moore 1978; Nestel et al. 1983; Sorensen 1992).
Recent studies report more mixed results. Some show that women still
suffer tremendous income losses following divorce. Bianchi et al. (1999)
analyzed women with children using data from the Survey of Income and
Program Participation that extended through 1990, and found post-divorce
declines in median per capita income of 29%. Smock (1993, 1994), using
data from the National Longitudinal Survey of Youth that extended through
1988, showed that women who had married and divorced by age 31 suffered
declines in median per-capita income ranging from 21% (for whites) to 35%
(for African-Americans). But none of these studies tell the whole story.
According to Current Population Survey data, only 29% of divorced women
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in 2001 had children. Also, nearly 90% of divorcées are now over the age of
31.
More inclusive studies using recent data suggest that divorced women’s
financial prospects have finally begun to improve. Nationally representative
data from the 1987-1994 National Survey of Families and Households show
that the economic consequences of marital disruption, as measured by per
capita income, have declined about 40% since the early 1980s (McKeever
and Wolfinger 2001). This finding is supported by Current Population
Survey data, which indicate that poverty rates for single-mother families
achieved a record low (25%) in 2000 (Dalaker 2001). Although this figure
includes families produced by death and out-of-wedlock birth, it suggests
economic improvement for divorced women. Furthermore, research
accounting for differential taxation and complex patterns of physical custody
suggests that the economic consequences of divorce might have declined as
early as the late 1980s (Braver 1999).
The weakening effect of divorce on women’s incomes is reflective of the
more general trend in gender inequality in the United States. Implicit in the
divorce literature is the argument that women’s post-divorce drop in
standard of living is attributable to the transition from living in a household
that participates in the labor market to being an individual who does so. In
the past this meant that most women, who either subordinated their own
careers to those of their husbands or, more likely, left the labor market at
marriage, were suddenly forced back into employment without the
advantages their husbands had accrued by working continuously (Weitzman
1985). Furthermore, from a labor market perspective it is not surprising that
younger women and women with children suffer precipitous declines in
income following divorce. Younger workers and mothers traditionally have
had low earnings.
Although divorcées’ economic disadvantages remain rooted in the
institutions of the labor market, the position of women in these institutions
has changed a great deal. One important development concerns the human
capital women now bring to the work place. Between 1980 and 2000 the
proportion of women with college degrees rose from 13% to 24%, while
those with high school diplomas increased from 66% to 84% (United States
Bureau of the Census 2001a). All else being equal, education increases
divorcées’ earning power. Also, the gender gap in wages narrowed over the
last 15 or so years (O’Neill and Polachek 1993; United States Bureau of the
Census 1999). These developments were aptly summarized by Suzanne
Bianchi (1997) several years ago at a Consortium of Social Science
Associations Congressional Breakfast seminar: "Men and women are not
equal, but when it comes to market work, to earnings, to the jobs they hold,
the changes are all in the direction of greater equality."
6. Shifting Fortunes in a Changing Economy 5
Divorcées have benefited from changes in marriage as well. Women’s
median marriage age has risen to 25 (Fields and Casper 2001), so more
women have significant work experience before they marry. Furthermore,
married women’s labor force participation increased from 50% to 61%
between 1980 and 2000 (United States Bureau of the Census 2001a). Even
married women with children are increasingly likely to work, and divorcées
previously employed during marriage do not face the myriad problems
associated with reentering the labor force. Although these developments
help all women, they probably have greatest significance to the recently
divorced. After marriages end most women are under pressure to convert
their vocational skills into income.
Changes in fertility may also play a part in improving the economic
situation of divorced women. Family size has declined over time, so
recently divorced women now have smaller families to support (United
States Bureau of the Census 2001a). Furthermore, child support laws have
been revised in favor of custodial mothers and average payment size is now
often larger than it used to be (Cancian and Meyer 1996; Grall 2000).
It is also possible that divorced women may only be faring better in
recent years because of changes in household structure. Although
remarriage has become less common over time, rates of post-marital
cohabitation have risen sharply (Martinson 1994). This implies that some
divorcées are finding ways of relying on others—outside of the traditional
solution of remarriage—should they be unable to provide for themselves.
On the other hand, fewer divorcées now move back in with their parents than
in the past (McKeever and Wolfinger 2001). It is important to account for
economic dependence in any attempt to understand the reasons for change in
divorced women’s economic well-being, particularly in light of the potential
policy implications. Historically, public aid to single mothers has been
predicated in part on their inability to provide for themselves. Does their
current earning power obviate the need for governmental support?
Conversely, evidence of increased economic dependence would undercut the
significance of higher post-marital incomes.
The dramatic social changes described here have the potential for greatly
reshaping the economic contexts in which divorcées find themselves. We
therefore examine how and why the incomes of divorced women have
changed since 1980. These research questions speak to current debates on
poverty and gender inequality in the market place by documenting the
changing welfare of one disproportionately at-risk population. In doing so
we address three of the main social trends in the United States over the past
25 years: the changing family structure, the growing role of women in the
labor force, and income polarization. Understanding the connection between
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these issues is an important step in accounting for social inequality in
contemporary America.
3. RESEARCH PLAN
Most research on the economic consequences of divorce has used panel
data to conduct before-and-after comparisons of divorcées’ incomes (e.g.,
Bianchi et al. 1999; McKeever and Wolfinger 2001; Smock 1993, 1994).
Although advantageous in many respects, before-and-after studies cannot
answer certain questions about divorce. Panel data generally span limited
periods of time, making it difficult to study trends in divorcées’ incomes.
Also, only a small percentage of respondents tend to get divorced in any
given interval between panels and as a result sample sizes have generally
been quite small, often on the order of about 200 women. Even larger
surveys like the Panel Study of Income Dynamics or the Survey of Income
and Program Participation cannot provide samples adequate for the
distributional analyses we employ.
In the current paper we take a novel approach by analyzing data from the
1980-2001 Current Population Survey (CPS) March Demographic Files, an
annually repeated cross-sectional survey. This entails a direct contrast
between divorced and married women, rather than comparing pre- and post-
divorce incomes for the same women. A large sample of divorced women
enables us to understand how changing economic, contextual, and personal
characteristics have affected their incomes. Moreover, the CPS allows us to
study trends across the income distribution.
Research on divorcées’ economic well-being has traditionally relied on
means or medians to summarize income distributions, but simple summary
statistics cannot tell us whether some divorced women are doing better at the
expense of others (Bernhardt et al. 1995; Morris et al. 1994). Have all
divorced women fared better over time, or has a rising middle class of
divorcées obscured economic stagnation by others? In conjunction with the
large CPS sample size, recently developed methods for analyzing
distributions (Handcock and Morris 1999; Fortin and Lemieux 1998) permit
new insight into how divorced women have fared across the entire income
distribution. In particular, we will address three questions:
1. What factors are responsible for divorcées’ economic progress?
2. How much has economic dependence on relatives and income transfers
helped divorced women?
3. Are all divorcées faring better than in previous years, or only those at
certain points of the income distribution?
6. Shifting Fortunes in a Changing Economy 7
4. METHODS
4.1 Data
We use data from the 1980-2001 Current Population Survey March
Demographic Files (United States Bureau of the Census 2001b). The CPS is
an annually-repeated national probability sample of households in the United
States; the March survey contains demographic variables appropriate for
research on divorced women’s incomes. The total sample size for the 22
years analyzed is 1,124,160. The study begins at 1980 for two reasons.
First, it marks the beginning of the Reagan presidency, often thought to
herald a new economic regime (Kymlicka and Matthews 1988; Lekachman
1982). Second, Garfinkel and McLanahan’s (1986) landmark study of
poverty in single-mother families analyzed CPS data extending through
1980.
We analyze only divorced and married women. Other women, as well
as men, are omitted from the sample. Although never-married mothers are a
rapidly growing demographic group (Rawlings and Saluter 1994) and tend to
be even poorer than divorced mothers (United States Bureau of the Census
1997), the reasons for their poverty are somewhat different than for divorced
women and therefore merit their own investigation. The same is true for
widowed women. Finally, we omit separated women due to the design of
the CPS. Most respondent characteristics, including marital status and
family size, are measured at the time of the interview, while income
measures are lagged a year. As many separated women probably dissolved
their marriages in the year prior to the interview, their per capita incomes
often reflect their husbands’ earnings but their current family size.
Supplemental analyses show that separated women report median per capita
incomes almost three times those of divorced women.
As measured by the CPS, income provides two analytic challenges. First,
heaping occurs because survey respondents tend to round off their reported
incomes (e.g., $24,573 becomes $25,000). Second, the CPS topcodes
incomes for high-earning respondents. Neither of these data issues affect
our results because we analyze the position of respondents within the income
distribution for divorced women, rather than actual dollar amounts. Most
divorcées fall into the same general income category whether or not they
round their incomes. Similarly, high incomes would fall into the upper
income categories irrespective of topcoding.
Income is measured in 2001 dollars, adjusted using the consumer price
index (Bureau of Labor Statistics 2002). All analyses are weighted. In
regression analyses we report Huber-Weight standard errors, to adjust for
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biases potentially induced by the weights and the cluster-sample design of
the CPS (Winship and Radbill 1994).
4.2 Sample selection issues
Most studies of divorced women’s incomes have used panel data to
conduct before-and-after comparisons. Although our cross-sectional
analysis of CPS data offers many advantages, it raises the concern that
sample selection could affect our results. If financially well-off women
make the transition from separation to divorce especially quickly, worse-off
women would be underrepresented in our sample. Poorer divorcées will also
be underrepresented if financial need motivates them to remarry quickly.
The same holds true for women who form cohabiting relationships
subsequent to divorce. Finally, the population of divorced women could
itself reflect self-selection: perhaps only women who anticipate post-marital
prosperity choose to leave their husbands. Any of these biases could
produce misleading estimates of divorced women’s economic well-being.
Previous research allays concerns about sample selection issues. Using
Panel Study of Income Dynamics data, Ono (1995) shows that wives with
high incomes are less likely to divorce within a calendar year of separation,
presumably because it takes more time to divide large estates. There is no
income effect in the subsequent year. Only a couple of years after separation
does income begin to increase the likelihood of divorce. By this point about
75% of separated couples have officially ended their marriages. Sample
selection in the transition from separation to divorce should therefore not
bias our results towards artificially inflated incomes for divorced women.
Another selection issue concerns whether impoverished women are
especially likely to remarry in order to ameliorate their financial situation.
But this is not likely to be a source of selection bias: Divorcées' employment
status, highly correlated with income, does not affect the chances of
remarriage, at least for whites (Martinson 1994). This result probably
reflects two countervailing effects. On the one hand, poorer women have a
greater need to remarry, since remarriage represents one of the best ways for
divorced women to improve their incomes (Morrison and Ritualo 2000); on
the other hand, poorer women are less attractive to prospective spouses.
Perhaps these effects offset one another, yielding no relationship between
income and remarriage.
A third selection issue concerns the propensity of divorced women to live
with partners out of wedlock. Remarriage rates have declined in the last
thirty years (Martinson 1994); over the same period cohabitation became
much more common, especially among divorcées (Bumpass and Sweet
1989; Casper and Cohen 2000; Martinson 1994; see also Bumpass and Lu
6. Shifting Fortunes in a Changing Economy 9
2000). Divorced women may now be more inclined than ever to improve
their financial situations by living with partners out of wedlock. This is an
important issue, because it speaks to the question of women’s economic
dependence on men. The CPS allows us to measure cohabitation, so we will
be able to differentiate between single and cohabiting divorcées.
The fourth and final possibility for sample selection bias concerns
whether women self-select out of marriage into divorce. This seems
unlikely for two reasons. First, if the population of divorced women
disproportionately reflected those who saw themselves well prepared for
single life, we would expect women who initiated separation to fare better
after their marriages ended. But this is not the case: women who report
leaving their husbands fare no better financially than those whose former
husbands initiated divorce (McKeever and Wolfinger 2001). Furthermore,
Smock et al. (1999: 794) demonstrate through a multi-stage model that “. . .
if married women were to divorce, their average level of economic well-
being would be about the same as that of divorced women.” These findings
cast doubt on the notion that women self-select into divorce based on their
self-perceived financial prospects.
Although not technically a sample selection issue, the CPS data do not
allow us to know for how long divorced women have been divorced. This is
not a liability because the economic consequences of divorce generally
persist for at least several years after the disruption (Duncan and Hoffman
1985; Stirling 1989; Weiss 1984). The reason seems clear: if divorcées lack
the resources needed to improve their incomes it will likely take at least
several years to acquire them. Conversely, if women have work skills they
will probably put them to use soon after their marriages end. Over time
divorced women may eventually be able to improve their earning potentially,
so our results should be viewed as “average” figures for all divorced women.
4.3 Univariate analyses
We compare per capita incomes of divorced and married women to study
trends in the economic consequences of divorce. Per capita income is
computed by dividing family income by the number of people in the family.
Family income in itself is not as useful for studying the economic
consequences of divorce. Losing a husband usually entails the loss of a
family’s primary wage earner, so family income always declines
precipitously after marital disruption. But lower family income by itself
does not necessarily connote a lower standard of living, because family size
has also declined. Per capita income accounts for changing family sizes.
Furthermore, declines in family size over time may lead to improved
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standards of living even if divorced women’s incomes remain constant,
because families now contain fewer children to support.
An alternative to per capita income is a measure of the ratio of income to
needs, often defined as the ratio of income to the poverty line. Like per
capita income, income-to-poverty line ratios respond to economies of scale,
but these measures are most important when considering the impact of
divorce on men’s income. For women, both measures show relatively
similar economic losses occurring as a product of divorce (Bianchi et al.
1999). Since income-to-poverty line ratios and per capita income tell
substantively similar stories, we only report results based on the latter.
To study univariate trends in divorced women’s income we employ both
traditional univariate statistics and new graphical methods of data analysis
that depict distributional trends. These allow us to examine change for
divorcées at different points in the income distribution, as well as to
ascertain the extent to which income polarization has occurred. Following
Handcock and Morris (1999: 21), we examine the changing distribution of
divorced women relative to 1980 income levels. If Y0 represents the income
distribution at 1980, F0(y) the cumulative distribution function, Y the income
distribution of a later year, and F(y) the cumulative distribution function for
that year, then the relative distribution can be represented as R=F0(Y). R
thus measures the relative rank of any position in the comparison
distribution, Y, relative to Y0.
All analyses exclude cohabiting divorcées, ranging from 10% of divorced
women in 1980 to 15% in 2001. As has always been true for remarriage,
nonmarital cohabitation has become an effective route to economic recovery
for divorced women (McKeever and Wolfinger 2001; Morrison and Ritualo
2000). Moreover, unmarried-couple households have increased almost five-
fold since the late 1970s and divorcées are especially likely to enter
cohabiting unions (Casper and Cohen 2000). The CPS only added direct
means of measuring cohabitation in 1995, so we use the adjusted POSSLQ
method described by Casper and Cohen (2000) to identify cohabiting
respondents. This has two drawbacks. First, adjusted POSSLQ does not
allow us to differentiate opposite-sex roommates from cohabiting partners.
Perhaps as a consequence adjusted POSSLQ overestimates the actual
number of cohabiting couples, although the rate of overestimation has
remained relatively constant over time. A second and more serious problem
concerns the compatibility of adjusted POSSLQ with income measures that
account for economies of scale. Per capita income and income-to-poverty
line ratios are based on the number of people within a family, but adjusted
POSSLQ couples always span two families within a single household. This
makes it impossible for us to compare the incomes of single and cohabiting
divorcées.
6. Shifting Fortunes in a Changing Economy 11
4.4 Multivariate analyses
We model divorced women’s family income in both 1980 (N = 4,202)
and 2001 (N = 4,547) as a function of human capital, work status, living
arrangements, and other factors. Earnings from child support, alimony and
public aid are subtracted from family income, so our results reflect the
effects of independent variables on earnings; the impact of transfer income is
considered in additional analyses. Although the optimal solution would be
to conduct a regression analysis of per capita income or income-to-poverty
line ratios rather than family income, doing so is ill-advised because such
analyses imply interactions between family size and all independent
variables (Smock 1993: 368). We then decompose the differences between
1980 and 2001 incomes to differentiate the effect of changes in average
resources from changes in returns to these resources. The univariate
analyses confirm relative monotonicity in income trends, so analyzing the
endpoints of the 1980-2001 time series captures the changing effects of the
covariates on divorced women’s incomes. Moreover, decomposition
analyses require discrete data points—there is no way to decompose our
entire time series.
Most regression analyses of economic well-being use log-income as a
dependent variable, with the objective of predicting mean log-incomes.
Although adequate for studying the effects of covariates in any given period,
predicting mean log-incomes is problematic for studying change over time.
As we demonstrate in the univariate analyses, the shape of the income
distribution has changed as well as its mean. Comparing means fails to
capture the consequences of shifting distributions. A solution, as shown by
Fortin and Lemieux (1998), is to study the effect of covariates on
respondents’ locations within the income distribution using a rank regression
approach. For both 1980 and 2001 we divide family income into 50
intervals, each containing approximately 2% of the income distribution.
This provides adequate categories to approximate the income distribution
without spreading the sample too thin. The distribution of 50 income
categories provides the dependent variable, with estimation conducted via
ordered logistic regression. The resulting parameter estimates can be
interpreted as the log odds of a 2% increase in one’s position in the income
distribution. More important, the decomposition of 1980 and 2001 results
reflects greater sensitivity to changes in the income distribution than would a
decomposition of means based on ordinary least squares regression.
Education, included in multivariate analyses as a measure of human
capital, is dummy coded as less than a high school degree, high school
graduate, some college, four year college graduate, and graduate degree.
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Occupational status and hours worked allow us to ascertain how
women’s labor market participation has contributed to their economic
progress. Hours worked is dummy coded as not working, (0 hours)1,
working part-time (1-39 hours), and working full-time (40+ hours).
Occupational status is measured with a standard SocioEconomic Index (SEI)
of occupations (Hauser and Warren 1997); unemployed respondents are
assigned a value of 0 for this variable.
Living arrangements may benefit divorced women’s economic well-
being. Smock (1993) showed that many divorcées improve their financial
situations by living with parents or other relatives, so we measure both with
dummy variables. Due to limitations of the CPS it is impossible to identify
the presence of a parent in households where the parent moves in with the
divorcée, rather than vice versa. In these uncommon instances respondents
residing with a parent or parents are coded as living with other relatives.
About 90% of the children of divorce live with their mothers at least
some of the time (Cancian and Meyer 1998). Although children adversely
affect their mother’s earnings (Budig and England 2001; Waldfogel 1997),
family size has declined in recent years (United States Bureau of the Census
2001a). Also, the relationship between fertility and divorce is complex
(Lillard and Waite 1991). For these reasons we explore the impact of
children on divorced women’s incomes. We use two measures: number of
co-resident children (coded as a set of dummy variables) and an additional
dummy variable measuring the presence of any children under age six. Pre-
school age children make it more difficult for single mothers to work.
We use three other independent variables. The first is size of SMSA,
which is dummy coded as living in a metropolitan area with a population
greater than one million. Although cities have more jobs (United States
Bureau of the Census 2001a), they also have higher divorce rates (Bramlett
and Mosher 2002; Sweezy and Tiefenthaler 1996). Gradations for SMSAs
smaller than one million are available in 2001 but not 1980. Second, given
well-known racial differences in income we employ dummy variables
measuring whether respondents are white, black, or other racial background
(including non-black Hispanics). Again, more detailed measures became
available only recently. Third, we control for age and its square to account
for well-known life course differences in income.
6. Shifting Fortunes in a Changing Economy 13
5. RESULTS
5.1 Univariate analyses
Figure 6-1 shows trends in women’s per capita income between 1980 and
2001. For each year median income is plotted separately for divorced and
married women. Throughout the time series divorced women have far lower
per capita incomes than married women. Only by 1998 does divorced
women’s median income surpass that of married women in 1980.
Nevertheless, over the years of the study all women’s median per capita
incomes rose steadily. The only lasting departure from a steady upward
climb comes in the early 1990s, when a recession produced temporary
declines for both groups.
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
1980 1983 1986 1989 1992 1995 1998 2001
Year
Per Capita Income
Divorced Married
Figure 6-1. Women’s Per Capita Income by Marital Status, 1980-2001
How much has the economic well-being of divorced women improved?
Table 6-1 summarizes changes in income over time by marital status. The
top panel of Table 6-1 shows that divorced women’s median per capita
income grew 48% from 1980 to 2001. This was a somewhat faster rate of
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growth than that of married women, which increased 34%. Although both
groups of women have benefited from changing economic conditions,
divorcées have shown greater improvement over the last twenty years.
Table 6-1. Changes in Per Capita Income
1980 2001 % change
Median
Married women $14,153 $18,976 34%
Divorced women $10,780 $16,000 48%
Lower Quartile
Married women $8,968 $11,250 25%
Divorced women $5,736 $8,304 45%
Upper Quartile
Married women $21,871 $31,353 43%
Divorced women $18,499 $29,000 57%
Analyzing only median per capita income potentially masks changes in
the overall income distribution. Real income has declined since 1980 for all
demographic groups except the college educated (Farley 1996). Moreover,
women’s economic progress relative to men’s can be partially attributed to a
decline in men’s real incomes at the lower end of the income distribution
(Bernhardt et al. 1995). This should drive down gains in married women’s
per capita income relative to divorced women’s for lower-income couples,
because men will no longer be contributing as much to per capita income in
married families. Improvement in women’s real income can be also be
attributed to polarization within women’s earning (Bernhardt et al. 1995).
For these reasons it is informative to assess divorced women’s economic
progress at various points in the income distribution.
The second panel of Table 6-1 shows changes in real income for the
lower income quartiles, while the third panel considers the upper quartile.
The comparison is interesting for several reasons. First, divorced women in
the lower quartile have improved their incomes only slightly less (45%) than
the median divorced woman (48%). Improvement in divorcées’ economic
well-being cannot be solely attributed to dramatic gains by the higher
deciles. Gains in the lowest quartile are especially pronounced in
comparison to the slow progress of married women in the same quartile
(25%). Although income polarization has hurt married couples in the lower
quartile, divorced women have not apparently been so greatly affected.
6. Shifting Fortunes in a Changing Economy 15
As might be expected, divorcées in the upper quartile have fared
especially well. Their incomes show the most dramatic improvement of all
groups depicted in Table 6-1 (57%), outstripping both married women in the
same quartile (43%) and divorced women in the lower quartile (45%).
Divorced women in the upper quartile have several factors working in their
favor. Not only are they the beneficiaries of changes that have aided
divorced women in general, they may have also profited from the
polarization of wages among American workers.
We can further understand the nature of wage polarization by
comparing changes in the relative income distributions of married and
divorced women over the study period. To do so we plot the changing
proportion of women who fall into 1980 income deciles. As with other
univariate analyses, separate plots are presented for married and divorced
respondents. Looking first at married women, Figure 6-2 reveals a gradual
shift of per capita income towards the upper deciles in married women’s
families from 1980 to 2001. There are dramatic gains in the upper deciles of
the distribution, losses in the middle, and slight losses in the bottom deciles.
1
3
5
7
9
1980
1983
1986
1989
1992
1995
1998
2001
0
5
10
15
20
25
Proportion in
1980 income
decile
Income decile
Year
Figure 6-2. Relative Distribution of Per Capita Income, Married Women
Divorced women show a somewhat different pattern, as displayed in
Figure 6-3. Similar to married women, there have been large gains in the
16 Chapter
6
higher deciles. Thus more divorcées now have per capita incomes that only
the top 10% of divorced women in 1980 could attain. However, there is an
even greater drop than for married respondents in the number of women in
the lower earning deciles. While 8% of married women in 2001 had
incomes that would have placed them in the lowest income decile in 1980,
this is true for only 6% of divorced women. Overall, divorceés are being
drawn out of the lower deciles to a greater extent than are married women.
This suggests less of a “shrinking middle” for divorced women than for their
married counterparts. It also implies that divorcées have not suffered from
the income polarization that Bernhardt et al. (1995) finds for women in
general. Excluding dramatic gains in the highest decile, the shape of
divorced women’s income distribution has not changed as radically as that of
married women.
1
3
5
7
9
1980
1983
1986
1989
1992
1995
1998
2001
0
5
10
15
20
25
30
Proportion in
1980 income
decile
Income decile
Year
Figure 6-3. Relative Distribution of Per Capita Income, Divorced Women
5.2 Multivariate analyses
Our multivariate analysis compares divorced women in 1980 and 2001,
the end points of our time series. Means or percentages for independent
variable are shown in Table 6-2; all changes are significantly different
6. Shifting Fortunes in a Changing Economy 17
except for coresidence with parents.2 Between 1980 and 2001 divorced
women’s labor force qualifications increased considerably. Twenty-nine
percent of 1980 respondents did not have high school diplomas. By 2001,
only 15% failed to finish high school. The number of women with four-year
college degrees grew 7% during these years, while the number with some
college increased 14%. Average occupational status also increased, from 34
to 37. Employment fell 1%, from 77 to 76%; however, the percent of
divorced women in full-time work increased 1%, from 58 to 59%.
Furthermore, the average age for divorcées rose from 43 in 1980 to 50 in
2001. All else being equal, older women have more work experience.
In recent years divorcées have had far fewer children, due to both
declining fertility and modest gains in paternal custody. Only about half of
1980 respondents had no resident children; by 2001, over two-thirds were
childless. The number of women with multiple children also declined
substantially. Perhaps more important, the number of divorced women with
children under six shrank from 14% to 6%. Young children in particular
make it difficult for single mothers to work. Taken together, these factors
suggest that divorcées in 2001 had far greater earning potential than they did
in 1980.
Table 6-3 shows the results of the ordered logistic regressions of position
in the income distribution. Looking first at the model for 1980, most of the
independent variables are significantly related to income and in the expected
direction. Living with a parent or other relative, being white, living in a
large metropolitan area, age, and all vocational characteristics are positively
related to income. Divorcées with two or more children make less money
than do those with one or no children. Finally, women with young children
make less money than those who are childless or only have children over age
six.
There are several important changes across the years of the study.3
Between 1980 and 2001 occupational status (SEI) became more important in
determining income, as did higher education. The distance between the
college and high school educated has risen, as is true for all workers in the
U.S. during this period. On the other hand, the effect of being in the labor
force has declined considerably, with the coefficient for part-time work
losing significance in 2001. Just being employed is apparently no longer as
important for obtaining a higher income. By 2001 divorcées had to have
strong workforce qualifications and a good job in order to make more
money.
Other changes concern family structure. The negative financial
implications of children have declined, so that by 2001 only women with
three or more children incur an income penalty. The income penalty
associated with children under the age of six has also declined, though it
18 Chapter
6
Table 6-2. Percentages or Means for Independent Variables
1980 2001
Vocational Characteristics
Education Less than H.S. 29% 15%
H.S. graduate 41 32
Some college 18 32
College graduate (4 year degree) 7 14
Advanced degree 5 7
Hours Worked None 23% 24%
Part-time 19 17
Full-time 58 59
SEIa 34 37
Additional Income Sources
Alimony/child support received 32% 19%
Amount alimony/child supportb 5,224
(2,430)
6,944
Public aid received 15% 3%
Amount of public aidb 5,934
(2,760)
3,835
Family Characteristics
Number of children Zero 52% 71%
One 23 16
Two 17 10
Three or more 9 4
Children younger than six 14% 6%
Living with parent(s)c 7% 6%
Living with other relative(s) 10% 12%
Other
Residing in large city 43% 49%
Race White 78% 73%
Black 15 15
Other 6 11
Age 43 50
Notes: Percentages may not sum to 100 due to rounding error. Figures are weighted. Ns are
4,142 for 1980 and 4,541 for 2001. All change from 1980 to 2001 significantly (p < .05)
different except where noted.
aMeans reported for those who are currently working.
bMeans reported for those who received given type of aid; amounts expressed in 2001 dollars,
with 1980 dollar amounts in parentheses.
cNo statistically significant change between 1980 and 2001.
6. Shifting Fortunes in a Changing Economy 19
Table 6-3. Ordered Logistic Regressions of Income Ranking
1980 2001
Vocational Characteristics
Education Less than H.S.
H.S. graduate .60*** .32***
Some college .66*** .53***
College graduate (4 year degree) .53*** .98***
Advanced degree .97*** 1.44***
Hours Worked None
Part-time 1.42*** .11
Full-time 2.52*** 1.09***
SEI .03*** .05***
Family Characteristics
Number of children Zero
One .01 -.14
Two -.25* -.18
Three or more -.53*** -.27+
Children younger than six -.80*** -.64***
Living with parent(s) .81*** .74***
Living with other relative(s) 1.85*** 1.81***
Other
Residing in large city .33*** .39***
Race White
Black -.26** -.28**
Other -.31** -.21*
Age .06*** .03+
Age2 / 1000 -.23+ -.04
Log-Likelihood -14619 -16385
+p < .10; *p < .05; **p < .01; ***p < .001
Notes: Analyses are weighted. Ns are 4,202 for 1980 and 4,541 for 2001.
remains negative and statistically significant. Also, the positive effect of
coresidence with parents or other relatives remained relatively stable over
time.
There has been little change regarding living in a large city or race. In
both years those in large cities have higher incomes, and non-whites lower
incomes. While the relative size of the effect for black and other non-white
women has switched, the differences between coefficients is not large. On
the other hand, the effect of age on divorcées’ incomes has diminished
20 Chapter
6
considerably. This shows that by 2001 the incomes of older women were
very similar to those younger women were able to earn.
5.3 Predicted income densities
We employ a regression standardization in conjunction with the ordered
logit models estimated for 1980 and 2001 to further explore how the income
distribution has changed for divorced women. The result, shown as a
density plot of predicted incomes for 1980 and 2001, appears in Figure 6-4.
A Kolmogorov-Smirnov test for equality of distributions (Kanji 1999), based
on mean-standardized versions of the two density distributions, shows them
to be significantly different (D = .32, p < .05).
Fewer cases fall into the far left-hand side of the plot for the 2001 data
than the 1980 data, suggesting that over time more divorced women have
escaped the bottom of the income distribution. The modal point of the 2001
distribution is lower than the 1980 mode. This in accord with the univariate
results presented in Table 6-1, which show that financial growth has been
slowest for divorcées in the middle of the income distribution. Far more
cases fall just to the left of the mode of the 2001 distribution. These
probably reflect the population of divorcées who in 1980 occupied the very
0
0.05
0.1
0.15
0.2
0.25
0.3
Density
1980 2001
Figure 6-4. Predicted Income Densities for 1980 and 2001 (p < .05).
6. Shifting Fortunes in a Changing Economy 21
bottom of the income distribution. In addition, some of the women who
used to fall into the middle of the distribution now have incomes placing
them in the upper income deciles.
Based on these changes, the most pronounced trends evinced by Figure
6-4 has been economic progress out of the bottom income deciles, and into
the upper deciles. These trends mirror Table 6-1 and Figure 6-3, which both
show strong growth over time by divorced women in the lower and upper
income quartiles. Perhaps these results are most interesting because they run
counter to the polarizing trend observed in the general population. The
density plots for 1980 and 2001 show no signs of income polarization;
indeed, divorced women’s economic progress appears to have occurred in
both the lower and upper deciles at the expense of the middle of the
distribution.
In order to ascertain whether changing respondent attributes—as
opposed to changing returns to any given level of attributes—have affected
income we construct a counterfactual density plot of predicted values on the
dependent variables. Figure 6-5 graphs the density of the predicted 1980
income distribution against the simulated predicted density distribution of
income in 1980 if the distribution of personal characteristics in the
population were the same as in 2001; in other words, the predicted density
based on the 1980 model but the 2001 data for all independent variables.4 A
Kolmogorov-Smirnov test shows that the two mean-centered distributions
are significantly different (D = .28, p = <.05). Figure 6-5 shows that were
personal characteristics at 2001 levels in 1980, there would have been fewer
women at the bottom of the income distribution and more at the top.
Changing levels of respondent characteristics have therefore facilitated the
reduction in poverty among divorced women since 1980, and improved the
prospects of women previously in the middle of the income distribution.
Additionally, Figure 6-5 shows no meaningful growth at the very top of the
distribution commensurate with the losses at the bottom; in other words, no
new elite based on rising levels of human capital and other respondent
characteristics seems to have developed. Divorcées across the income
distribution have benefited from changing vocational attributes and other
respondent characteristics.
Figure 6-5 also shows signs of increasing bimodality among divorcées’
incomes. The density line for the distribution based on 2001 levels of
respondent attributes twice crosses the trace for 1980 incomes in a short
stretch of the bottom half of the distribution. This bimodality implies a
growing divide between those more and less qualified for lucrative
employment by 2001. However, this observation should be qualified. The
increasing bimodality does not reflect a growing division between richest
and poorest families, but instead a growing division in the economic
22 Chapter
6
structure of the middle class. Were women in 1980 to have the same
characteristics as in 2001, those earning middle level incomes would have
been divided into a smaller but worse-off group and a larger, better-off
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Density
1980 data, 1980 model 2001 data, 1980 model
Figure 6-5. Predicted and Counterfactual Income Densities: Contrasting Changing
Respondent Characteristics (p < .05).
group. Those in the latter would have profited especially strongly from
higher returns to any given level of human capital, returns which are no
longer present in 2001 (see Figure 6-4). For this reason we do not see this
sharp bifurcation of the middle income earners realized in the actual 2001
distribution.
A second counterfactual test is to compare the predicted 1980 income
distribution against the simulated predicted density distribution of income if
the returns to respondent characteristics were at 2001 levels in 1980; in other
words, the 2001 model but the 1980 data. The two density distributions,
unlike those depicted in Figure 6.5, are not significantly different according
to the Kolmogorov-Smirnov test (D = .24, p = n.s.) and are therefore not
shown. Thus the income distribution for divorced women would not have
changed substantially over time if respondent characteristics had remained
stable; greater returns to any given level of human capital and other
respondent attributes cannot by themselves account for divorcées’ economic
progress.
6. Shifting Fortunes in a Changing Economy 23
5.4 Economic dependence
We now turn to the contributions of nonemployment income and other
forms of outside support to divorced women’s economic well-being. Table
6-2 shows that relatively few respondents have benefited from
nonemployment income. In 1980 about one third of the sample reported
receiving child support or alimony (hereafter jointly referred to as child
support), but receipt had declined to 19% by 2001. Receipt of public aid
also declined, from 15% to 3%. On the whole, divorcées now fare better
while simultaneously receiving fewer income transfers. But what about the
divorced women still receiving money? To what extent do they depend on
these income transfers? It would undercut our findings on the economic
improvement of divorced women if their progress had been driven in part by
greater dependence, albeit by fewer recipients, on child support or public
aid.
To address this question we measure dependence by computing the
percentage of total family income separately attributable to public aid and
child support. Median levels of dependence for each income source are
shown for 1980 and 2001 in Table 6-4. Neither child support nor public aid
can account for divorcées’ economic progress. For the median recipient,
child support provided just under one third of total income in 1980. By
2001, child support comprised only 14% of total income, even though
average payment size rose (see Table 6-2). The transformation has been
even more dramatic for public aid dependence. In 1980, it was the sole
source of income for the majority of its recipients. In contrast, it provided
just 28% of all income for the median recipient. Even economic dependence
based on the combined receipt of both child support and public aid has
abated. Three percent of respondents received both types of income
transfers in 1980; the corresponding figure for 2001 was less than 1%.
Although the majority of recipients of both child support and public aid had
no other sources of income in 1980, combined receipt only comprised 38%
of the total income for the few divorcées receiving both in 2001. These
trends demonstrate that divorced women now fare better financially even as
income transfers became less important.
Table 6-4. Median Contributions of Nonemployment Earnings to Total Family Income
Median percentage of contribution to family income 1980 2001
Alimony/child support 31% 14%
Public aid 100% 28%
Both 100% 38%
Notes: Figures restricted to respondents receiving each type of aid. Results are weighted.
24 Chapter
6
Economic dependence may also take the form of coresidence with
parents or other relatives. Traditionally many women moved back in with
their parents subsequent to marital disruption (Smock 1993), although more
recent research suggests that this trend has abated in recent years (McKeever
and Wolfinger 2001). The results shown in Table 6-2 confirm that
coresidence with parents has declined. Seven percent of divorcées lived
with a parent in 1980; by 2001, only 6% did. On the other hand, coresidence
with other relatives increased over these years, from 10% to 12%. These
modest changes cannot be interpreted as a meaningful increase in economic
dependence for divorced women. Moreover, the regression results presented
in Table 6-3 show that the relative economic benefit of living with a parent
or other relative remained relatively stable between 1980 and 2001.
6. DISCUSSION
This paper has revealed noteworthy trends in divorced women’s
economic well-being between 1980 and 2001. Although marital disruption
still takes a strong toll on women’s incomes, divorcées are faring better over
the last 22 years. We are not the first to note improvement in divorced
women’s incomes, but no previous research has chronicled systematic
change over a period exceeding twenty years. In this regard, the Current
Population Survey offers a rich and underutilized resource for tracking
economic well-being. We now return to the three questions we posed earlier
in the paper.
6.1 What factors are responsible for divorcées’ economic
progress?
We offer two answers to this question. First, changes in the labor market
have helped many divorced women prosper. Although divorcées are now
employed at the same rates as they were in 1980, their higher levels of labor
force qualifications have been decisive in their growing incomes. Second,
concurrent changes in the American family structure have benefited
divorcées’ labor force participation. The typical divorcing woman is older
and, based on data for all women between 1980 and 2001, more likely to
have worked during marriage (United States Bureau of the Census 2001a),
so she is more likely to have significant work experience than was the case
twenty years ago. More than two-thirds of divorcées are now childless,
whereas twenty years ago half had children to support. Perhaps more
important, the number of divorced women with pre-school age children has
6. Shifting Fortunes in a Changing Economy 25
fallen from 14% to 6%. All of these changes make it easier for divorcées to
support themselves after their marriages end.
6.2 How much has economic dependence on relatives,
cohabiting partners, and income transfers helped
divorced women?
Divorced women’s financial gains cannot be attributed to economic
dependence. Although divorcées receive more alimony and child support
than they used to, it comprises a far smaller portion of their incomes than it
did in 1980. The declining economic significance of public aid funds has
been even more dramatic. Public aid supplied the majority of its divorced
recipients with all their income in 1980. By 2001, far fewer divorcées
received public aid and even among its recipients it only comprised about
one fourth of their total incomes. Economic dependence on parents and
other relatives also cannot account for divorced women’s higher incomes.
Divorcées themselves deserve much of the credit for their economic progress
over the last twenty years.
One major change in the demographic status of divorced women that we
can only examine in passing is the increase in post-marital cohabitation. Ten
percent of CPS divorcées were cohabiting in 1980. By 2001, cohabitation
had risen to 15%. This 5% increase is small enough that increased selection
over time from divorce into cohabitation could not have had a large effect on
divorced women’s economic well-being. Furthermore, increases in post-
marital cohabitation have done little more than make up for declines in
remarriage. Recall that rates of remarriage have abated over time
(Martinson 1994). Between 1970 and 1984 increases in cohabitation more
than offset the falling remarriage rate (Bumpass et al. 1991). Although this
result has not been updated, the trend probably persisted. Thus the women
who now cohabit subsequent to divorce probably reflect the same population
that would previously have remarried. In other words, divorcées are now
forming post-marital relationships at the same rate they did twenty years
ago, but nowadays more are living with their partners out of wedlock instead
of marrying. If there is no appreciable trend in overall post-divorce union
formation, there is probably also no change over time in divorcées’
economic dependence on men.
26 Chapter
6
6.3 Are all divorcées faring better than in previous
years, or only those at certain points of the income
distribution?
This paper has contributed to research on the economics of divorce by
examining both summary statistics and income distributions. We show that
divorced women have achieved economic gains across the income
distribution, not suffering the income polarization that characterizes the
population as a whole. Although the changing structure of the family, most
notably divorce and the rise in out-of-wedlock births, has certainly
contributed to the growth of the American underclass, the conventional
wisdom about income polarization should not be uniformly applied to
everyone: The income distribution has changed differently for the
demographically prominent group of divorced women, who numbered more
than eleven million in 2000 (United States Bureau of the Census 2002).
7. CONCLUSION
Our analysis of CPS data offers optimism for future generations of
divorced women. Certainly there is room for improvement, but many signs
point to continued economic progress. At the start of the 21st century
divorcées, like all women, are better positioned for success in the job market
than ever before. Their labor force qualifications have increased
dramatically. Although men and women are still not equal in the workplace,
the gap has narrowed to the considerable benefit of those left vulnerable by
marital disruption.
We view it as a propitious development that divorcées at the bottom of
the income distribution have raised their incomes almost as much as the
median divorced woman. Changes in human capital and other respondent
characteristics responsible for divorcées’ higher incomes have helped
women across the income distribution. Furthermore, divorced women in the
higher income deciles have not derived any substantial benefit from higher
returns to any given level of human capital. These findings allay concern
that economic progress has been driven by the gains of a small group of
middle- or upper class divorcées.
Our results show that the relationship between family structure and
poverty, one of the staple findings of the sociology of inequality, is complex.
In particular, it is important to consider the labor market position of
household heads who are traditionally at risk of being poor. Female
householders have been able to better themselves economically, even with
reduced government assistance, by dint of the changing nature of their labor
6. Shifting Fortunes in a Changing Economy 27
market participation. This includes higher levels of education and better
jobs, as well as increased experience resulting from demographic shifts like
delayed marriage and reduced fertility. In order to understand poverty in
America for any segment of the population it is necessary to take account of
changing gender inequality in institutions like the educational system and the
labor market.
Our research illuminates some of the reasons behind abating rates of
inequality in contemporary America. The striking improvement in divorced
women’s incomes is one reason why poverty rates for mother-headed
families recently reached a 40-year low of 25% (Dalaker 2001). Although
divorced women as a whole now fare better—a trend that will hopefully not
be reversed in the current economic downturn—single-mother families still
have poverty rates several times higher than two-parent families. To a
certain extent this is inevitable: families headed by mothers will always lack
the male incomes that have traditionally supported husbands, wives, and
children. Moreover, out-of-wedlock births have also played an important
role in accounting for high poverty rates. Although our findings lead us to
be optimistic for divorced women, the poverty rate for female-headed
households remains one of the most important social problems in the United
States.
ACKNOWLEDGEMENTS
Renata Forste provided helpful comments on a previous draft. We also
thank Eric Kostello for programming, Linda Keiter for obtaining the Unicon
rebuilds of the CPS, Phil Cohen for advice on POSSLQ, and Angela Casady,
Al Hernandez, Ann House, and Kim Shaff for research assistance. The
second author’s participation in this research was partially funded by a grant
from the Bireley Foundation. The authors contributed equally to this work.
ENDNOTES
1. This includes both unemployed and not in the labor force. The overwhelming majority of
those who do not work report being out of the labor force, so we are unable to distinguish
these respondents from those who are unemployed but looking for jobs.
2. Significance tests are weighted and adjust for the effects of weights and cluster sampling on
standard errors.
3. Differences in coefficients across models cannot be tested for statistical significance in the
analyses we employ. Since the dependent variables for 1980 and 2001 represent distinct
income distributions, the data cannot be pooled across survey years.
4. Unfortunately there is no way to perform a partial standardization (e.g., to use 1980 values
on some independent variables and 2001 values on others) to determine which predictors
28 Chapter
6
have been particularly important to divorced women’s economic progress. Although a
subset of means in a standard decomposition can easily be switched, partial distributions in
this type of analysis cannot be.
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... The results provide new evidence on whether divorce redirects women's life course earnings trajectories and whether the historical context in which these events occur influences the impact of the event. Because labor earnings constitute the bulk of divorced women's income, far exceeding unearned income (McKeever & Wolfinger, 2005 , Table 6-2), our investigation highlights a mechanism by which women may offset an income-reducing family status transition. Women's long-run earnings also have implications for later-life outcomes including lifetime earnings and retirement benefits (Couch et al., 2013). ...
... Smock (1993) shows comparable declines in family income following marital dissolutions in the late 1960s and 1980s. Two studies looking at more recent divorces, the National Survey of Families and Households (McKeever & Wolfinger, 2001) and Current Population Surveys (CPS) from 1980(McKeever & Wolfinger, 2005, suggest mitigated, yet still substantial, negative effects of divorce for women's financial wellbeing. A recent study using multiple SIPP panels reveals a relative decline in the reductions in married women's household income following divorce between the 1980s and 2000s (Tach & Eads, 2015). ...
... For example, to the extent that women in weak marriage markets partner with men with lower earnings prospects (Harknett & McLanahan, 2004), it could affect both the likelihood of divorce as well as women's work patterns during marriage. We also could not account for non-employment income, such as alimony, child support, or public transfers, although a declining share of divorced women report such income (McKeever & Wolfinger, 2005, Table 6-2). ...
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We investigate divorce as a turning point for women's earnings trajectories and whether those patterns have changed over recent decades. We use a unique data set that links retrospective family history data from the Survey of Income and Program Participation to longitudinal earnings records from the Social Security Administration. Using a panel fixed-effects model, we retrospectively compare women experiencing a marital dissolution across three divorce windows within a 25-year period (1970–1994) to continuously married women, from 3 years before to 10 years following separation. We find that women who divorced experienced long-lasting earnings increases, particularly among those who did not remarry. The increases in earnings levels are comparatively similar for those divorced at different times; however, percentage increases are significantly smaller for women experiencing divorce in more recent (1990–1994) relative to earlier (1970–1974) years. We also document lasting employment gains and higher earnings among employed women arising from divorce. In combination, the results extend our understanding of divorce as a salient turning point in women's work lives and call attention to possible changes in this process over recent decades.
... Most studies place the magnitude of the household income drop for women in the range of 23%-40% (see Tach & Eads, 2015 for a summary) during the year following divorce. This decline in standard of living appears to have weakened somewhat for women in more recent divorce cohorts, presumably reflecting their growing economic independence during marriage as the proportion of household income contributed by wives has risen in recent decades, buffering the negative economic consequences of divorce (McKeever & Wolfinger, 2005;Tach & Eads, 2015). In addition to their greater labor force attachment while married, being older and having fewer young children at the time of divorce smoothed economic recovery for women divorcing in recent years (McKeever & Wolfinger, 2005). ...
... This decline in standard of living appears to have weakened somewhat for women in more recent divorce cohorts, presumably reflecting their growing economic independence during marriage as the proportion of household income contributed by wives has risen in recent decades, buffering the negative economic consequences of divorce (McKeever & Wolfinger, 2005;Tach & Eads, 2015). In addition to their greater labor force attachment while married, being older and having fewer young children at the time of divorce smoothed economic recovery for women divorcing in recent years (McKeever & Wolfinger, 2005). An examination of cohort variation in the economic consequences of divorce for mothers showed that household income fell by about 40% for mothers who divorced in the 1980s versus just 33% for those divorcing in the 2000s (Tach & Eads, 2015). ...
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... Seventy percent of divorced and never-married mothers received some sort of public assistance, compared to about 25% of married mothers. As found in previous work, welfare receipt has fallen for all mothers over time (McKeever & Wolfinger, 2005. By 2002 the numbers were much more similar, with 24% of never-married mothers, 12% of divorced mothers, and 4% of married mothers getting assistance. ...
... Our findings are essentially consistent with our previous research based on Current Population Survey data (McKeever & Wolfinger, 2005), yet provide a more nuanced depiction of how mother's lives unfold. Married mothers have the highest incomes, followed by divorced mothers and then never-married mothers. ...
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