Divorce and the market economy

The urban world continues to mull over the impact of divorce on society, on the family, on the partners directly involved in the divorce, and specially, on children. What escapes most is the fact that the splintering of families underscores a rise in production levels in the economy. The extended family comprising of the male 'head of a family' with his wife, children, their families and grandchildren living under the same roof, eating out of the same kitchen and pooling in their labour and income resources to cover expenses is slowly on its way out in urban India. Exceptions are traditional business families where living under the same roof is directly linked to business interests and any split within is presumed to inevitably lead to a split in business interests to the detriment of all concerned. In this sphere too, however, the positive effect of such split on market forces has remained a grey area. When the joint family breaks up to create several nuclear families, the first outcome is a rise in the demand for housing. The entire housing sector – real estate, promoters of real estate, construction and recovery of unused land, expands in monetary and business terms. Traditional homes covering spacious footage of premium land fall under the promoter's axe and new skyscrapers take their place, mercilessly destroying a once-beautiful and expansive skyline.

The environmental waste is taken for granted – lesser greenery in the cityscape, lesser land for children's parks and playgrounds, narrower pavements and more human waste to litter the streets. But a capitalist economy thrives on such ecological waste instead of lamenting it. Just so long as there is 'development' at the cost of ecology.

These market repercussions are multiplied when even the nuclear family breaks up as the result of separation or divorce. One of the partners must move out to seek accommodation elsewhere. Relocation means a rise in demand for housing all over again, notwithstanding the narrowing of the area of apartments to handkerchief-sized flats. There is an immediate rise in the demand for consumer durables – the partner who moves out with or without children, must get a set of consumer durables (a refrigerator, a mixer-grinder, a television set, furniture, a telephone connection, a gas connection, perhaps, a computer, and so on). This considerable rise in demand, directly contributes to production, distribution, exchange and employment through backward and forward linkages. The long-term and short-term effects when a couple split are a continuous rise in the demand for consumer perishables as well – cereals, pulses, vegetables, and so on. There is a rise in the demand for domestic help too. Among other benefits – more money goes to the exchequer by way of taxes under different heads, more employment opportunities across the board, increased potentials for home business such as home-made catering, telephone banking, car-pool and so on. The happiest of course is the legal fraternity. Meanwhile, the judiciary sees the possibilities of expansion of family courts in the country.

Sadly, neither the establishment at the central and state levels, nor the investment sector, have been able to tap the infinite potential inherent in the separation of families. The financial infrastructure has not been able to adjust to this new family structure in the Indian economy. Banking, insurance and public-issues have never bothered to create separate areas of savings and investment for separated couples. Till date, Indian investment companies and banks have no provision for housing loans for single partners of separated couples. This is a specific lack because re-partnering or remarriage after separation and divorce is not at all common. Loans for automobiles and two-wheelers have no provision for separated partners though this could lead to much greater revenues than at present.

Couples today, in general, have a much lower tolerance level within marriage than couples in their fifties and sixties. As a result, the divorce rates in India's urban sphere are shooting up. The question of who is guilty is not important because couples are now looking at it as a question of choice. In the US, studies have shown that women´s increasing financial independence reduces their motivation to enter into and or to maintain relationships. Consistent with this hypothesis, early studies typically found that women with limited economic resources were more likely to remarry than other women. However, this pattern may have altered due to the following factors:
Changes in attitudes and values regarding gender roles — such as the greater value placed on women´s economic achievements and men´s involvement with children;

Changes in the labour market — such as reduced employment opportunities for older men;

Changes in consumption patterns — which may make two incomes seem increasingly necessary to achieve a desirable standard of living;

Changes in law and public policy — such as substantial increases in social security payments and more rigorous child support enforcement.

These changes reflect and reinforce the benefits for women of having independent financial resources, both in and out of relationships. In this context, re-partnering may not be perceived as a solution to the financial strain of divorce — even for women with few economic resources. Besides, the social stigma attached to re-partnering among women in India proves to be a big hurdle for young divorced women at a moment when they may need to choose remarriage both as a social and economic solution to their problem.

India does not have any social security scheme for divorced partners who suddenly find themselves at the wrong end of the stick if they are not employed. Prolonged litigation pending divorce places further pressure on their finances, thereby also delaying any plan of remarriage or re-partnering following divorce. Exchange theory conceptualises children as an economic appendage and as a barrier to new relationships due to the constraints on time and financial resources they impose. Looked at from a different perspective, children might be perceived as making up for a new relationship following divorce, particularly if sexual relationships are perceived as high risk and not reliable emotionally. At a minimum, children provide company and can act as the hub of an ongoing family life for the resident parent.

There is a need for the financial sector to respond to changing mores and realities. For example, banks, insurance companies and private financing agencies should make available provisions for loans on easy instalments and low interest to fund court cases, so as to provide security to the litigants. This might be done on a welfare-oriented basis, much like banks taking up rural development of remote areas. This will also automatically place hidden 'ceilings' on exorbitant fees charged by exploiting lawyers. Responses such as this would be a better alternative to shedding tears about the changing family scenario, for change, as the saying goes, is the only thing that remains constant.