I don’t have time this week, so this is a repost of an early post of mine that didn’t get much play. I did a little editing. It’s part of the Sexonomics series and is on divorce, so it fits what has been discussed here recently.
The Cost of the Risk of Material Loss in Divorce
Marriage is often discouraged in the Manopshere, and a single male, choosing whether I want to marry or stay an eternal bachelor is something important. Now, there’re a lot of reasons provided for why to avoid marriage, but the risk and consequences of divorce are easily the most convincing argument. So, I’m going to create a series on the economics of marriage.
This first post will be the economic cost of the risk of divorce for the average bachelor considering marriage.
At another time, I will attempt an economic analysis of the immaterial losses of divorce and the benefits of marriage. Then I will combine it all together in a cost benefit analysis.
What are the odds of divorce?
The “50% of marriages end in divorce” statistic is thrown out a lot, but this number includes those with multiple marriages and divorces, which skews the number higher than for people considering their first marriage, among other problems.
So, according to the US Census Bureau, for men, only about 60% of men reach their 25th anniversary for their first marriage (p. 11), which means about 40% of men did not.
Now, the data is by age cohort, and those married earlier had a greater chance of reaching any particular marriage anniversary milestone. For example, those married in 1975-79 had a 54.4% chance of reaching 25th anniversary, while those in the married in 1960-65 had a 66.9% of reaching this milestone. But, those married in 1975-79 had the worst chances of attaining any particular marriage milestone; they were peak divorce you might say. Since then, younger marriage cohorts have been more likely to reach milestones.
Meanwhile, in Canada, Statistics Canada has it that about 40% of first marriages will end in divorce.
So, we will estimate there is a 40% chance that a male entering their first marriage will divorce.
(Remember, the chances of marriage ending in divorce can vary depending on a wide range of variables, which I am not going to calculate at this time, but I might go into them in-depth in the future.)
How much does the divorce process cost?
The cost of the actual divorce process varies considerably, depending on a wide range of variables. A simple divorce will run about $1000, while a contested divorce can run from about $8,000-$133,000.
According to this, the median cost for mediation is $5,000, while the average contested divorce costs about $20,000.
So, we’ll say your divorce process will be about $20,000.
(Here’s a calculator if you’d like to play around).
What about Spousal/Child Support?
Your chances of paying spousal support depend on the amount of child support already paid and your income. There’s a ton of laws on this, so I’ll just use this calculator to calculate this.
The average Canadian household income is: $74,700
Two-earners without children: $79,700
Two-earners with children: $85,600
One-earner without children: $58,100
One-earner with children: $60,900
The average length of marriage is 14.5 years, with the average age of divorce for men being 44 and for women, 41.
So, putting the average divorce and income in the calculator we can get the average cost of support (both child and spousal) payments come divorce (in Ontario), assuming children live with spouse:
Two-earners without children (Equal): $0
Two-earner without children (Primary – 2/3): $327/month for 7-14 years (10.5)
Two-earners with children (Equal): $0 + $619/month child support
Two-earners with children (2 – Primary – 2/3): No spousal support, $758/month
One-earner without children: $1,186/month for 7-14 years (10.5)
One-earner with children: $838/month for 7-14 years (10.5) + $905/month child support (10.5)
For your own income and planned family situation input the number in the calculator.
So, the average male will have to pay about $149,436 in support if sole provider, $73,458 in support if primary provider, and $0 in support if equal provider. (The cost of child support is there for illustrative purposes, but that would be the cost of having a child, not marriage and divorce and is not calculated here.)
One interesting thing to notice: if you’re the sole breadwinner, your likely monthly payments can actually decrease as mandated child support payments replace spousal support payments. I would not bank too much on this, as it’s likely just a quirk in Canadian law or the calculator and may not apply broadly.
US law does not seem radically different overall from Canadian law.
What about a Settlement?
In Canada, “the spouse with the higher net family property is required by law to pay his” spouse “half of the difference between the two spouses’ net family properties.” Net family properties being current assets minus both liabilities and assets at marriage.
In the US, there are two systems, community property and equitable distribution, depending on the state with variations in how they are distributed. The former divides assets gained during the marriage equally, but leaves property attained before marriage alone. Equitable distribution distributes property equitably (not necessarily equally).
In general, we can say that the property you acquired during the marriage will be split more or less in half. If the wife was the primary housekeeper, while the husband was the primary breadwinner, then the difference will be the wife’s payments for continued support of the house. If they both shared provider status roughly equally, then an equal distribution of marital resources should occur.
There does not seem to be much economic cost to the average husband at the point of settlement in Canada, unless he sunk significant sums into the marital home prior to marriage and the wife did not match these sums after entering the marriage.
In the US, one could economically lose if the equitable distribution was not necessarily equal, or by quirks of local law, but for the average divorce, these would not present much of a cost. There might be extreme cases in both systems where quirks or abuses of the law could lead to unequal distribution either way, but
Other Cost Considerations
This is not to say that this will not increase economic hardship. Having to pay the expenses for two dwellings will, by itself, greatly increase economic hardship on both ex-spouses. For the ex-husband specifically though, the extra cost of two dwellings would be accounted for in the spousal/child support payments taken from his income.
It is possible a divorce could affect a male’s job performance, and thus his earnings, creating additional economic cost, but this would be outside my ability to remotely calculate.
The Total Material Cost of Divorce Risk for the Man Considering Marriage
Our formula:
Costs of Divorce Risk = Risk of Divorce * (Cost of divorce process + cost of support)
Average Male Single Earner
40%*(20,000 + 149,436 ) = $67774.40
Average Male Primary Provider
40%*(20,000 + 73,458) = $37383.2
Equal Male and Female Provision
40%*(20,000 ) = $8,000
For the average male who’s considering marriage and planning to be the sole breadwinner of the family, the material cost of the risk of divorce would be just over a full year’s worth of pay. For the average male who plans to be the primary but not sole breadwinner, it would be somewhat less than a full year’s pay. For the average male who plans a marriage where both partners earn equally, it would be a few months’ worth of pay.
So, if you plan on marrying and being the sole or primary breadwinner, you would have to ask yourself if you would pay roughly a year’s salary to be married.
* This analysis will be done for Canada. Canada’s divorce laws are generally nationally coherent, with federal laws and. The US’ divorce laws differ widely between states, so I can’t really calculate for the US. On the other hand, for the majority of men, the analysis shouldn’t vary too significantly; this should be roughly applicable to most and sufficient for analytical purposes. Check your own jurisdiction’s laws for personal information.
The loss of investment income and capital gains, particularly on the division of existing property (since it happens at t=0 unlike monthly payments which are stretched out so their NPV is discounted), is also important.
If you’re evenly splitting property of, say $200K both ways, average age of male at divorce of 44, you’re losing out on capital gains on $100K for a good 15-20 years before even hitting retirement. Even with a relatively conservative real return of 3%, that’s $56K after 15 years or $80K after 20. This lost income alone could be an extra year or two of working at the end of your life.
A good, comprehensive analysis. The numbers are a bit off, in my experience, at least based on practice in the United States.
Child support, in the US, is basically a flat tax in most states (that is, the formulae amount to being roughly a certain percentage of income). Let’s assume 15% (which is roughly what it is in most states, give take 3-5%). If you earn 100k and are paying 15% for 17 years, that can be quite a bit more than one year’s pay depending on the age of the children whe the payments start. With one child at age 5 at divorce, 15k per year for 17 years (payments go untli age 22 in the US) would be 255k. I personally pay just under 20k per year in C/S, and when it ends the total that will have been paid is going to be ~340k, which I can tell you is more than one full year of pay for me! Keep in mind that this is after-tax income, so income that would otherwise be used for investment and so on and you can easily tell that the aggregate financial impact is nothing short of disastrous, and well in excess of one year’s pay or its equivalent.
Other factors that need to also be considered are:
1. The cost of disability insurance (routinely required by divorce settlements in the US) and term life insurance (similarly routnely required for at least the term of the C/S payments).
2. The cost of college tuition (also routinely included in divorce settlements in the US).
3. The cost of medical insurance for the child(ren) to age 25 (routinely required in divorce settlements in the US).
Note when I say “routinely required by divorce settlements”, what I mean is that courts routinely require these provisions to be included in the divorce settlement before the court will approve it, so even though these are not statutorily required, they are de facto legally required because the courts routinely impose them as a condition of signing off on the divorce settlement, which is required to finalize the divorce.
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I’m not sure what you mean by “For the ex-husband specifically though, the extra cost of two dwellings would be accounted for in the spousal/child support payments taken from his income.” The C/S payments in the US are based on a percentage of income (typically gross income, and payable out of net income). There are no “deducts” for the payor’s personal housing cost taken into account in determining the level of payment. I’m not sure if this is the case in Canada, but it isn’t done in almost all US states. That incremental cost is sucked up by the payor spouse and his C/S payments are not reduced or impacted at all by it.
I realize your numbers discount based on the risk of divorce, but I think they still understate the cost.
Note (sorry for posting multiple comments — not able to edit the previous ones) that when I say that C/S is calculated on the basis of gross income I don’t mean gross taxable income, but income before non-tax expenses. So they back out your taxes and social security contributions and so on, but not your housing and other costs. It’s “gross” of these costs, at least in the US — perhaps not so in Canada.
the best cure for divorce is not to get married. no man can lose half his shit or more, have kids taken away from him, be charged with false rape/abuse allegations, or experience the humiliating stigma of cuckoldry if he doesn’t get married!
What these ‘red pill women’ are really about
More about these ‘red pill woman’ that all of you love so much!
ybm says:
July 11, 2012 at 3:07 pm
Forgive me if I don’t celebrate women turning against feminism. What will they replace it with is a good analysis to look at:
-They’ll convince men that they are weak, dainty, inferior little creatures who need a man to protect and guide them.
-They’ll probably want to go back to being able to stay at home while hubby works 60+ hours a week at a pay lower than inflation adjusted incomes from the 60s.
– The divorce/alimony/child support/ racket will be kept
– Alpha fucks beta bucks is a genie that wont be going back into the bottle, neither will female promiscuity.
– They will expect chivalry from men again. Including men being conscripted to fight wars for them, ‘women and children first’ and the man always paying on dates.
Some victory. Congrats men! Lay done your arms, the war is over! WE WON!!
And I think for the majority of idiot males, they’d actually think they won.
@ doji: I did not take that into account.
@ nova: I kept the cost of children out of this calculation, which is why it may seem low. This post was to measure divorce only. I calculated the cost of having children here, although, not directly in relation to divorce:
http://freenortherner.wordpress.com/2012/06/19/economic-analysis-of-children/
@ patriot: That is true. It is also incomplete; the safest route is not always necessarily the best route.
@ a fan: Are you lolz? Also, what has this to do with divorce calculations?
@ a fan: Are you lolz? Also, what has this to do with divorce calculations?
Lzozozozllzo! It has everything to do with divorce statistics – these women have been bernankified and want to keep the current divorce racket going! These statistics and your analysis show that modern women use marriage a way to confiscate man’s assets – women are married to ben bernanke and the federal reserve, not their alleged ‘husbands’.
You can try and deny it, but the evidence is clear. Divorce statistics are the way they are since nearly all women have been thoroughly desouled and bernankified.
Zlozozozlozo!