Research links savings to divorce risk

Couples tend to save substantially more as the risk of divorce grows, according to a new report. The results are based on the saving behaviour of married couples in the Republic of Ireland before and after 1996 – when laws permitting divorce in the country were passed. Researchers calculate that a rise in the risk of divorce of around 40% among non-religious marriages after the reform led to these couples increasing their savings by 5-8% of income relative to religious households – which were relatively unchanged by the legalisation. They discovered that for every 10% increase in the risk of marital separation, families raise their savings, as a proportion of household income, by two percentage points. The research, by Dr Berkay Ӧzcan from the London School of Economics and Political Science and Dr Libertad González from Pompeu Fabra University in Barcelona, is published in The Journal of Human Resources. Dr González said: “The increase was particularly pronounced for non-religious marriages relative to religious ones.”

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