How Social Roles Affect Women’s Finances After Divorce
By: M. Scott Gordon
Social and cultural shifts in the last couple of decades have meant more women feel empowered to file for divorce and to live separate lives from their partners. Also, more women are earning more than their spouses in heterosexual marriages. However, women continue to financially struggle after divorce. According to a recent study conducted by Allianz Life Insurance Company of North America, despite the fact more women are employed in full-time jobs and even running businesses, “women say they are struggling to make progress with financial confidence and decision making.”
That study, 2019 Women, Money and Power, suggests that many women are “experiencing a steady downward trajectory” in terms of finances. What can this study tell us about the relationship between social roles and finances after a divorce?
More Women Own Businesses, Yet More Women Continue to Struggle Financially After a Divorce
By 2017, more than 11.6 million businesses were owned by women, according to the National Association of Women Business Owners (NAWBO). Those businesses generate approximately $1.7 trillion in sales and employ about nine million Americans. Of all privately held businesses, nearly 40 percent are owned and run by women. When it comes to particularly high-value businesses, as many as 20 percent of businesses that earn $1 million or more each year are women-owned companies. If more women are involved in business and finance than ever before — with many of them thriving — why are women still struggling with financial confidence after a divorce?
According to an article in Bloomberg, post-divorce financial problems hit older women the hardest. To be sure, “when women divorce after age 50, standard of living plunges 45 percent.” While older men who get divorced also see a dip in their standard of living, that standard of living declines on average only by 21 percent. For younger men, there is a “small or negligible effect of divorce on . . . incomes.”
Despite Women Business Owners, Many Women Revert to Traditional Roles
Although more women own businesses and run their own companies, more women are struggling financially after divorce. As we previously pointed out, many older women who get divorced experience the most drastic financial decline. Yet even younger women are reverting to traditional roles in marriages. When they get divorced, they also experience acute financial problems.
As the study explains, “fewer women say they are the breadwinner in their household” as of 2019. In 2019, only about 38 percent of women are the breadwinners in their families, compared with 47 percent of women in 2016 and 60 percent of women in 2013. Moreover, the study reports fewer women, on average, have more earning power now. In 2019, 42 percent of women report having more earning power than their spouses, compared to 50 percent in 2016 and 57 percent in 2013. The rate of women self-identifying as the CFO of the household also has declined.
In other words, even though more women own businesses, many other women are finding themselves in traditional roles where the husband is the primary earner (and thus the spouse most able to bounce back financially from divorce).
Contact a Chicago Divorce Lawyer
If you have questions about finances and women’s divorce, a Chicago divorce lawyer can help. Contact Gordon & Perlut, LLC for more information.