Money Can't Buy Me Love

Money Can't Buy Me Love

If you won the lottery, would the additional wealth increase your chances of a lasting relationship? If you are single, would you be more likely to marry? If you are married, would you be more likely to stay that way?

A new paper asks exactly these questions and finds that money can’t buy you love – in fact it might just buy you the freedom to walk away from love. *

Millions of dollars are given out every week in national and local lotteries. For economists, lottery data is the closest thing a randomized experiment that tests the effects of wealth on well-being without having to deal with messy effects like education and health that both affect an individual’s ability to generate wealth and personal well-being.

Using a data set that contains information on the marriage and divorce choices of tens of thousands of lottery winners who won between $600 and $50,000, the authors of this study ask this question: Are the people with the larger lottery winnings, those who won closer to $50K, luckier in love than those who won less?

The answer is an emphatic (i.e. statistically significant) “no” and, as it turns out, the single women in the sample with large lottery winnings were much less likely to marry in the three years following their win than those who  won $1,000 – 40% less likely in fact.
Why are larger jackpot-winning women less likely to marry? Maybe the position of financial independence given to women allows them to be more discriminating about who they marry and so finding a partner takes longer. Or maybe the issue is control over the lottery winnings; perhaps they don’t want to share decision making with a husband who may have different ideas as to how the money should be spent and so postpone marriage until the money is gone. 

There is no such effect for single men whose marriage decisions appear to be independent of how much they win in the lottery.

As societies have become wealthier, people are marrying less and less frequently.  Interestingly, this research suggests that a fall in marriage rates that is caused by wealth is purely the consequence of women’s marriage decisions – not men’s.  And the decline in woman’s willingness to marry isn’t simply because women are working longer hours or dedicating themselves to their careers instead of the business of finding a husband.  This behavior of single female lottery winners – whose wealth has fallen into their laps – is all about the money.

Woman who are already married when they win are not choosing to divorce as a result. The divorce rate of married winners of $25k to $50k in the three years following the win was about 0.5 to 1% lower than those who won $1,000. This effect is very small relative to the baseline 3 year divorce rate of 8.5% suggesting that statistically there is no effect of lottery winning on divorce rates.

So the increase in societal wealth alone does not appear to be encouraging people to divorce more frequently. Or maybe it is, because greater wealth makes it easier to afford a divorce, but there is a countervailing effect of wealth that helps people stay together. So on average divorce rates do not change even if wealth is affecting individual couples' decisions.
Lucky in life, unlucky in love – or so the old expression goes – appears to be the case for single women only. As an economist, I would have to argue that whether or not women marry has nothing to do with luck but rather choice. As a single woman I like to tell myself that too.  Over and over again.
Hankins, Scott and Mark Hoekstra (2011). “Lucky in Life, Unlucky in Love? The Effect of Random Income Shocks on Marriage and Divorce.” Journal of Human Resources Vol. 46 (2).

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