Does Marital History Matter? Marital Status and Wealth Outcomes Among Preretirement Adults

Data from the 1992 Health and Retirement Survey are used to specify ordinary least squares (OLS) regression models predicting wealth. Separate models are estimated for men and women. The results indicate that individuals who are not continuously married have significantly lower wealth than those who remain married throughout the life course. Remarriage offsets the negative effect of a marital dissolution. There are significant gender differences in these effects. The results demonstrate that accounting for the sequence of marital events provides a detailed picture of the life paths that lead to wealth heterogeneity among the older population. From a life course perspective economic outcomes among preretirement age adults can be attributed to previous life course events (George, 1993; O'Rand & Krecker, 1991). Most studies explain economic outcomes as a product of participation in economic institutions over the life course. Work careers influence economic outcomes by determining access to pension benefits, shaping contributions to Social Security, and affecting one's ability to accumulate wealth (HoltzEakin & Smeeding, 1994; Schulz, 1995). Economic outcomes can also be affected by other life events, including changes in marital status over the life course (Crystal & Waehrer, 1996; Fethke, 1989). Numerous studies have documented the shortterm impact divorce has on economic well-being. Although some men have short-term increases in economic resources after a divorce, the majority experience economic losses (McManus & DiPrete, 2001). For women, economic resources drop approximately one-third during the first year after a divorce and the economic loss often persists until remarriage (Duncan & Hoffman, 1985; Holden & Smock, 1991; Peterson, 1996; Weiss, 1984). Despite the impact marital status changes can have on short-term economic status, few studies have explored how participation in marriage influences long-term economic outcomes. It is widely accepted that economic well-being in later life varies by current marital status (Gustman & Juster, 1995). Currently married older couples have higher median incomes and net worth than older adults who are widowed, divorced, or never married (Seigel, 1993). Further, currently married couples who have never been divorced or widowed have significantly higher income-toneeds ratios, higher net worth, and lower poverty rates than individuals who have ever been widowed or divorced (Holden & Kuo, 1996). Although previous studies identify the relationship between marital status and economic status, the findings are limited for four reasons. First, as the previous discussion indicates, a variety of economic status measures have been used. However, as noted by Hao (1996), the most commonly used measures (i.e., income and poverty rates) reflect economic resources at a given point in time, have various limitations because of differences in definitions across studies, and do not adequately determine consumption patterns. In contrast, wealth may be a more appropriate measure of economic status because it represents the resources that are available for sustaining consumption, particularly in the latter part of the life course. For example, wealth provides a safety net that enables people to cope with the financial aspects of disability, retirement, and poor health. Second, many studies that focus on the influence of marital status do not control for work characteristics. This is problematic because the observed economic differences between marital status groups might actually be attributable to labor force participation or access to pension plans. Third, it is important to consider the implications of separation and cohabitation. Often individuals in these two states are either excluded from the analysis or categorized as married and unmarried. Finally, no attempts have been made to distinguish between marital event sequences. From a life course perspective, different marital sequences (e. …