No-fault Divorce

What Went Wrong?

Allen M. Parkman

• Publisher: Routledge
• Year: 2019
• Print ISBN: 9780367154394
• eBook ISBN: 9780429719486
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

Since 1970, all the states adopted no-fault divorce statutes, which have had the unexpected effect of producing dire financial conditions for many divorced women and their children. In this important study, economist and lawyer Allen Parkman shows how no-fault divorce has systematically operated against the interests of these women and children. With rare economic and legal insight, Parkman argues that by changing the grounds for divorce without changing the laws that define and allocate property at divorce, the legal system created substantial injustices. The key mistake, he suggests, was in accepting a definition of property that did not include the income-earning capacity--human capital--of the individuals involved. Using human capital theory, Parkman criticizes current divorce law and presents a framework for reform that would reduce the injustices introduced by no-fault divorce. He concludes that a thorough reform, however, may require the changing of the grounds for divorce to mutual consent. This book is essential reading for scholars, professionals, and, indeed, for anyone interested in the health and future of the family and the well-being of women in contemporary U.S. society.

1
Introduction

Just over twenty years ago, California adopted the first unequivocal no-fault divorce statute in the United States.¹ Over the following fifteen years, all the other states and the District of Columbia enacted similar statutes establishing "irretrievable breakdown" or "incompatibility" as the only grounds for divorce or adding these to the preexisting fault grounds.² The new provisions were viewed as a major, and desirable, reform of the statutes in effect through most of the history of the United States, under which a divorce, when permitted at all, could only be obtained on grounds such as adultery, cruelty, or desertion,³ with the assumption that one of the spouses was responsible for the failure of the marriage. Most no-fault divorce statutes removed the consideration of marital fault from the grounds for divorce, the award of spousal support, and the division of property.

The Effects of No-Fault

The no-fault divorce laws have had dramatic and often unexpected financial effects on families in general and women in particular in dismantling a system that had been based essentially on mutual consent. This system had protected parties who had relied on their marriage continuing, but no-fault divorce reduced this protection and the resulting negotiating power of the spouse who did not want to dissolve the marriage,⁴ usually the wife.⁵ The loss of negotiating power has unfortunately reduced the incentive for spouses to make certain contributions to their family such as the contributions of married women who committed themselves to a career that accommodated that of their husband.

Today, both women and families are worse off. No-fault divorce has resulted in a decline in the welfare of divorced women and the children of divorced parents.⁶ Lenore Weitzman reported, for example, that divorced women and their children experience a 73 percent decline in their standard of living during the first year after a divorce.⁷ Elizabeth Peters showed that in 1979 women who were divorced in no-fault divorce states received less alimony and child support than in fault divorce states.⁸

Less obvious, but also substantial, has been the effect of no-fault divorce on families that stay married. The fault grounds for divorce had the effect of providing some protection against the potential costs of divorce for married women who chose to be housewives and mothers. No-fault grounds for divorce have forced married women to seek other forms of protection. Reduced incentives for women to be housewives and mothers and increased incentives for them to work outside the home and seek additional education to maintain their human capital--their income-earning capacity--have often reduced the welfare of their families.

These are not the results expected by the proponents of no-fault divorce. Fault divorce was attacked by many reformers because of the hypocritical procedures used by many people to obtain divorces.⁹ The fault divorce system was predicated on the belief that unless the breakdown of a marriage could be attributed solely to the wrongdoing of a single, identifiable spouse, divorce was not permitted. In most states, a divorce was not permitted if both spouses were at fault. The procedures used under fault divorce encouraged perjury and brought an adversarial process to situations often calling for conciliation. Normally only the innocent spouse could ask for a divorce and a guilty spouse who wanted a divorce found it very difficult to obtain a divorce without the cooperation of the other spouse. Many men argued that the result was not the protection of innocent wives but the requirement that husbands buy their way out of marriage.¹⁰ Some reformers felt that a reform of the divorce process could reverse the trend toward higher divorce rates that had been observed during most of this century.¹¹ In either case, the solution was obvious: remove the fault grounds from the requirements for a divorce.

I will argue that the primary problem with the no-fault divorce laws has been the ignoring of many of the costs associated with divorce resulting in undesirable decisions being made during marriage and at divorce. Central among the ignored costs is the effect of marriage on the income-earning capacities of the spouses--their human capital. Incorporating considerations of human capital into financial settlements under no-fault divorce would increase the welfare of families and society. Other costs of divorce to the spouses and children are more difficult to estimate and they may require a shift to mutual consent as the basis for divorce. The failure to grapple with the adverse effects of no-fault divorce has resulted in numerous adverse effects on society: In the two decades since the introduction of no-fault divorce, we have probably seen more changes in the structure and stability of the U. S. family than in any other period in U. S. history.¹²

An Economic Perspective

Marriage and divorce have long been active areas for analysis and discussion by sociologists and lawyers,¹³ but I believe the general absence of an economic perspective has obscured some problems. Economics is the study of choice:¹⁴ the choices that people make, or rationally should make, in an environment in which the array of goods and activities available to individuals exceeds their resources of income and time. My analysis here includes an investigation of the reasons why no-fault divorce statutes were introduced and why they have had a detrimental effect on U. S. families with particular attention to the deterioration in the financial welfare of divorced women and children of divorced parents.

Economic analysis, based on society's preference for efficient outcomes, provides an alternate explanation to the moralistic one given for the introduction of no-fault divorce. We live in a world in which wants--financial and psychological--exceed the available resources. Choices have to be made. Efficient outcomes occur when choices are made for which the benefits exceed the costs. Efficient outcomes increase social welfare. As the benefits and costs of activities change, the efficient choices change. Economists view the decision to marry and, sometimes, to divorce as based on the benefits and the costs associated with those choices. Over time, the costs and benefits of marriage and divorce can change and then the incentives to marry and to stay married change. Economists have argued that changes that have occurred since World War II, such as the expanded employment opportunities for women and the availability of improved forms of contraception, have reduced both the benefit of marriage and the cost of divorce for some people.¹⁵ Under those circumstances, we would expect to observe fewer marriages and more divorces. If the legal system conflicts with people's new preferences, especially for more flexible grounds for divorce, they will work to change that legal environment.¹⁶ Thus, social change created pressures to modify the fault grounds for divorce because in a changed society they were no longer efficient for some individuals.

Whatever the acknowledged need for change, actual changes that occur are the result of the political process. Many political analysts assign a public interest motive to legislators. Economists, however, taking a more cynical view see politicians basing their decisions on self-interest. Their primary goal normally is to be reelected. With that goal, they are particularly sensitive to the preferences of vocal pressure groups who provide verbal and financial support.¹⁷ In California, for example, the reform process was dominated by men, although they had the support of many women's groups.¹⁸ Sometimes the self-interest of politicians can be more narrowly focused. The assemblyman primarily responsible for the passage of no-fault divorce in California was going through a divorce at the time. It did not take a conspiracy for a male-dominated legislature to enact no-fault divorce legislation that seemed appropriate from their perspective and was based on the information that they had been provided. This is especially true when few of the proponents of divorce reform, male or female, were arguing that no-fault divorce would be a disaster, especially for divorced women and their children. The California Family Law Act of 1969,¹⁹ which began the nofault divorce revolution and set the standard for the statutes enacted in the other states, was passed by a male dominated legislature.²⁰

Much was made of the hypocrisy that occurred under the fault divorce laws, but it was evidence of the change in society's preferences, not the cause. There are many laws on the books, such as highway speed limits, that are hypocritical and these laws can remain on the books for indefinite periods, especially if they are not enforced. It takes both new circumstances and undesirable enforcement of existing laws to change laws. Certainly enforcement of the fault divorce laws was hypocritical, but an increase in the demand for simpler procedures for dissolving marriages was an important impetus for no-fault divorce legislation. The male-dominated reform process, together with the absence of a clear understanding of the repercussions of the legislation, resulted in the enactment of the specific no-fault divorce laws now in existence.

Economics can provide insights about why no-fault divorce resulted in the deterioration of the financial situation of divorced women and the children of divorced parents identified by Weitzman and Peters.²¹ Many of the reformers appear to have been so preoccupied with reducing the hypocrisy of the fault divorce system that few of them thought about the consequences of the new system--consequences that included a decline in the bargaining power of married women at divorce and, therefore, in their financial situations after divorce.²² The California Governor's Commission on the Family that initiated the fault divorce debate in that state did not include any economists or financial analysts.

When marriage was a more stable institution and the laws determining the grounds for divorce were strictly enforced, there were only a few divorces and the laws that controlled the financial repercussions at divorce were of secondary importance. As the demand for divorce by some spouses increased, these individuals found that the legal grounds for divorce were more restrictive than they wished. They also found the financial repercussions of divorce prescribed by the law unacceptable. The parties could fabricate evidence to establish the grounds for divorce and then, in theory, the courts would decide on property settlements based on legal standards.²³ In fact, under the fault divorce laws, most divorcing couples with significant wealth chose to negotiate a settlement rather than to rely on the courts' allocation.²⁴ Often one party did not want a divorce and a more generous financial settlement and custody of any children was necessary to induce that party to initiate the lawsuit and provide the obligatory testimony.²⁵ The innocent party had to be the plaintiff, so that a contested divorce was difficult under the fault divorce laws.²⁶ Even if both parties wanted a divorce, they had reasons to reject the legal financial arrangements as inequitable. Most women who had pursued the traditional roles as housewives and mothers knew that short-term alimony, limited child support, and the property allocation provided by law would leave them in a precarious financial position, especially compared to the financial condition of their husband.

Interrelated Laws

Problems developed with no-fault divorce because the reformers did not recognize the interrelationship among laws concerning the grounds for divorce, parental rights, and the financial condition of the spouses. Changing one set of rules without changing the others destroyed a delicate balance. Under the fault divorce statutes, the custodial and financial settlements were commonly based on the negotiations of the parties, with the spouse who did not want to dissolve the marriage having substantial power over the outcome. With no-fault divorce eliminating negotiations to establish the grounds for divorce, the previously disregarded laws that governed the custodial and financial repercussions of divorce became much more important--the financial condition of divorced women and children of divorced parents deteriorated.

In some states, eliminating the fault grounds for divorce was accompanied by the removal of fault as a factor in the other aspects of divorce such as property settlements and alimony. No-fault divorce eliminated the presumption that couples had an obligation to remain married and removed any reason for the party seeking the divorce to compensate the other spouse. California, for example, required an equal division of marital property. Another problem arose from the legal definitions of property failing to conform to basic financial principles. This discrepancy had little practical effect when most divorces were settled with only minimal reference to the applicable laws. But that all changed with the introduction of no-fault divorce.

Because marriage consists of two people coming together to participate in a collective action, economists view the financial aspects of the relationship much as a business partnership: If the marriage is dissolved, the parties should share the gains or losses of the partnership, but assets acquired outside marriage are not part of this distribution. Based on this framework, economic analysis would support a strict application of the principles of community property, in which each spouse has a half interest in property created during the marriage by their collective activities. From a statutory perspective, marital property is all property that is not defined as either spouse's separate property,...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Dedication
• Contents
• List of Tables and Figures
• Preface
• Acknowledgments
• 1 Introduction
• 2 Marriage and Divorce Laws
• 3 The Economics of Marriage and Divorce
• 4 The Introduction of No-Fault Divorce Statutes
• 5 The Impact of No-Fault Divorce
• 6 The Reform of No-Fault Divorce
• Appendix
• References
• About the Book and Author
• Index