Does Getting Married Increase Wealth and Income?

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Last updated on September 5, 2021 Comments: 8

The Urban Institute has issued a report stating the Millennial generation will have the lowest rates of marriage by age 40 than any previous generation. The report contemplates a variety of reasons for this shift, including a reduced role of marriage in a family household and the effects of the latest recession. But what does this mean for the financial future of today’s young mostly-singles?

Marriage certainly affects a couple’s finances. In many states in this country, certain effects are unavoidable by law. Nine states have community property laws, and in those states any money earned by either spouse or any property purchased bought by either spouse from money earned, if that money was earned while married, is owned equally by both spouses. But as a whole, this law doesn’t change the financial situation of the couple. If between two people cohabiting, the combined annual income is $150,000, that’s the case whether they’re married or not, whether they combine their bank accounts or not.

There may be some subtle differences. A non-married couple may need to buy separate health insurance, despite the fact that more frequently, employers consider non-married couples “domestic partnerships” and cover a domestic partner, regardless of the sex of the partner. Yet, if a partner is not covered automatically, health insurance for the family could be more expensive.

That, in itself, does not seem a strong enough reason for a researcher to make this argument, as she does in a news article about the Urban Institute’s report:

“The evidence shows that getting married increases wealth and income,” said Pamela Smock, a sociology professor at the University of Michigan.

Why would the act of getting married cause an increase of wealth and income? It may be true that wealthier people and those with higher incomes are more likely to get married in the first place, but that’s not what this researcher is saying. She is saying that marriage, independent of all other variables, not only correlates to higher wealth and income, but is a direct cause. I looked at the researcher’s list of recent publications, and did not see any articles or books focusing on wealth and income, those she has researched cohabitation extensively.

Marriage has a detrimental effect on an individual’s long-term wealth, and here are some of the more obvious reasons.

Couples who get married are more likely to have weddings. Weddings can be, but aren’t always, expensive events. Even otherwise frugal people are driven to spend more money than they could to make a memory for themselves and their families that matches the dreams they’ve had. Even with the best do-it-yourself wedding efforts, couples find weddings to be significant expenses that take resources away from other priorities, and in the worst case, pile onto already unmanageable debt.

A couple that decides not to get married can certainly opt to hold a ceremony to celebrate their togetherness, bringing friends and family together for a joyous occasion, but many do not. And if a lack of financial resources is one of the reasons to indefinitely delay a wedding, it wouldn’t make sense to hold a similar celebration for cohabitation.

I see nothing wrong with weddings, but I’d just like to encourage people to continue to think about their future financial security while planning them.

Couples who get married are more likely to have children. More and more, I’m seeing friends and family and their spouses opt to skip having children, and this reflects a national trend. And it must be related to what I’ve already mentioned in this article — as fewer Millennials get married before age 40, fewer choose to have children, even though there has been an increase of children born to couples who are not married.

Children are wonderful, and that’s what you’ll discover if you have children or if you ask any parent (who’s not dealing with a temper tantrum at that particular moment). But that doesn’t change the fact that children are expensive. The cost to raise a child to the age of eighteen can be $200,000 or more — and for most middle-class Americans, that’s going to be a gross understatement. Add any kind of prevalent developmental disability, like autism, and that total will skyrocket. And double your estimate if you plan to have two children.

Is it our duty to populate the world? Well, according to some beliefs, it is. But the choice to have children has a direct, measurable effect on the financial situation of a couple over the long-term, and it’s not positive. That’s not to say it’s a bad decision to have children; not all decisions in life rely on the financial outcome. In fact, the same people who propose the value of an education should be based solely on the return on investment seem to forget their dedication to that approach when you ask them whether their children have provided them with a good ROI.

Couples who get married are more likely to get divorced. This, and the other points above, should be obvious. No marriage means no possibility for divorce, and divorces are notoriously devastating for a couple’s finances, particularly when a couple has gotten into the habit of having only one adult bringing in an income. Add a child (or two or seven) to the mix, and a divorce can drive individuals to bankruptcy.

Unmarried households may be more transient, less permanent, but that doesn’t hold true for every couple. But overall, without marriage and an intertwining of finances, unraveling a relationship doesn’t have to mean there are any devastating financial consequences. There are fewer arguments over property, because all has always been owned by one partner or the other.

Where is the evidence that marriage increases wealth and income?

One potential reason a marriage might increase wealth and income is because of its status as a rite of passage. Despite changing society, many people feel that marriage is a necessary marker along life’s path, one that indicates a move towards an important stage of adulthood. And marriage, as well as having children, forces people to grow up. Maturing as an adult also means taking a more considered approach towards family finances. The stakes in a marriage are higher. You have more people to take care of, officially, and thus you are inclined to work harder at providing for your family.

And other people see this. It’s reflected in the attitude that one displays, consciously or not. Married men are more likely to get raises, promotions, and job offers, but married women are less likely to be awarded the same. Although society is changing, in married couples, men are more likely to have a job than women. These statistics play out in such a way that being married is good for a family’s economy.

This doesn’t necessarily mean that marriage automatically makes a man be more employable or have a higher earning potential; it could be that some men are both more likely to get married and more likely to be more employable, with some other variable having the biggest influence. But studies have shown that all other things being equal, if a supervisor infers that a man is married, he is more likely to be chosen for a positive career decision than if there is no inference.

In order to claim that getting married increases wealth and income, this employment bias would need to override the financial detriments listed above. Here’s how survivorship bias plays into this study, and will help make it seem like marriage is in fact better for a family’s wealth and income: couples who are divorced and remain so, and are therefore no longer married, disappear from the statistics. In other words, all the financial devastation brought on by divorce is missing from the data. This filter allows an interpretation that could be far from the truth. Even though most people getting divorced do in fact remarry, that marriage might occur after divorce-related financial problems, making that second marriage appear to be a good financial move.

Like any other research pertaining to families and finances, we all want vindication that we’ve made good choices. So it’s somewhat natural for married people to seek out data that validates the idea that marriage is a good financial move. College graduates want to believe that attending college (and attending their specific type of college, whether it’s Ivy League or a community college) was a good idea. We all seek out confirmation that the choices we make are good.

The path not traveled will always remain a hypothetical, though. Let’s all feel good about our choices, because there’s always the possibility that life and finances would have been much worse had the decision been different.

If you are or were married, has your marriage definitely resulted in more wealth and income? Whether or not you’re married, has the prospect for a better financial life influenced your decision?

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Article comments

Sarah Stilwell says:

Getting married does not increase your health or income. It only increases income if you choose to join your finances together. I know plenty of married people with no joint accounts because having a joint account is a choice you make on your own. You are not responsible for your spouses debt UNLESS your name is also on it. My husband was an impulsive spender and we never shared money, loans, credit cards, accounts – nothing. We split the living costs in half and put x amount into our own separate savings accounts for emergencies and showed each other the balance of our separate savings accounts at the end of the month. My money was mine, his money was his. If he splurged and ran out of money for game day tickets… He had to tough it out. If we put everything together into one account, we would have been fighting day and night over every little purchase my husband made (cause he spends a lot but he also made a lot). We assigned our financial obligations to each other and we never asked what the balance in our private accounts were. He had his car, I had mine. I bought my clothes and he bought his. We spent our own money and it was great because money is a big trigger for divorce. This is why most people cohabitate. We married because we wanted a child and I wanted to the security of knowing he couldn’t just walk out on me and that he would have rights to any children we had. Marriage laws in my state are written to protect the people in the marriage, not make them rich or healthy. Personal health and wealth is strictly an individual endeavor.

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Anonymous says:

I think marriage will lead you to two extreme, either much wealthier or much poorer. If you have a bad marriage, usually it will make you poorer. If you got a good marriage usually it will make you wealthier. When you are in a good marriage that bring happiness, usually you can work harder without feeling fatigued. It is happiness that make you wealthier after all.

Donna Freedman says:

Depends on whom you marry, I suppose. If your partner is a compulsive spender you will have trouble getting ahead.
That said: I’ve been divorced since 2006 and figured I’d remain single. Fortunately I found love in midlife and we have thrown in together as a couple. He owns the house we share and I contribute a set amount for fixed costs; I also pay for a few other items, such as phone and Internet, and share grocery costs. Since we both cook and are both frugal in other ways, the partnership is helping each of us meet other financial goals.
Plus there’s that whole *love* thing. It certainly has put a shine on my life. <3

Anonymous says:

A successful marriage between two responsible people should, in general, be a big plus for people’s wealth. Having 2 incomes, as well as the support and companionship of a spouse, can help make one’s life much better. That being said, it’s certainly possible that an unsuccessful marriage – whether to a financially irresponsible person or simply a marriage ending in divorce – could truly be a bad thing for finances. Pick wisely, and stay together – and reap the rewards.

Anonymous says:

Well my spouse and I had a cheaper/elopement style wedding in the Bahamas and we didn’t invite anyone, so it was basically the cost of a really nice honeymoon. We are not planning to have any children but wanted to get married to celebrate our partnership, as well as from the pragmatic point of view of dealing with estate issues if one of us were to die (we are Canadian and common-law partnerships are not treated the same in succession/estate taxation). At any rate, whether we married or not, I don’t think our financial situation would be any different from just co-habitating and splitting the bills as we do now. It’s possible that a sense of financial accountability might emerge more significantly in married couples due to having someone to “answer to”, or the sense of building something together, but I am not sure. Need another study for that!

Anonymous says:

I think the factors you’re forgetting is that cost of living is shared, food expenses per person go down and incomes can close to double if both people work.

Also, in the case of a working person / homemaker couple, the person at home can take care of things like shopping, cleaning, cooking without extra expense. This leaves more time for the the working person work extra hours which could lead to a promotion and more income (and subsequently more work.)


Anonymous says:

It’s made a significant positive difference for us. Well, maybe just me 😉 I didn’t bring any debt into the marriage, but having two breadwinners has been incredible peace of mind for me – to know that I’m not the last line of defense for 4 people and associated households, is amazing.

For the “investment” (hah) of a somewhat more expensive wedding than I wanted, we have increased our combined NW a significant amount, even despite that opportunity cost, and I’ve had more ability to use that greater combined savings to start investing more heavily (today’s post, for example).

Lots of good points about the costs of divorce and children, of course, I think the pressure (outside of personal beliefs) to marry and have children for the sake of doing it is foolish. Meanwhile my family are among those who quietly expect you to have children (usually vocally but not in my case) and I still don’t see what their point is. If you’re happiest unmarried with or without children, that should be fine!