There is evidence from the UK and US that income level is associated with marital instability. For Australia too, (our) preliminary results from the HILDA indicate that people with lower incomes were more likely to separate and less likely to partner between waves one and two, than people with higher incomes. Why is this case? One hypothesis is that lower income leads to greater stress and changes in behaviour such as increased alcohol consumption.

This paper will decompose the association between lower income and relationship breakdown. Using data from the HILDA, we will model the probability of a relationship ending. In addition to income level, duration of the union at wave one and broad demographic characteristics; the model will include measures of life satisfaction, mental and emotional wellbeing, and the extent to which a person feels time and debt stress. The inclusion of these latter factors in a model of relationship breakdown may override the importance of income. This would provide support for the hypothesis that economic hardship acts indirectly on relationship stability. However, if income remains a significant predictor of relationship breakdown this would be evidence of lower income acting via other mechanisms.