This research investigates the mechanisms through which divorce affects economic growth in 22 MENA countries from 2000–2023, moving beyond static correlational analyses that neglect growth dynamics and endogeneity. The key question is whether divorce impedes growth primarily by disrupting physical capital accumulation or through erosion of human capital. Employing the system Generalized Method of Moments (GMM) estimator and interaction term techniques to address endogeneity and simultaneity bias, the results show a significant negative correlation between divorce and growth. Divorce also exerts indirect effects via interactive channels (labor and physical capital), though causality is not definitively proven due to methodological limitations. Notably, the interaction term "divorce × labor" – capturing the diminishing effect of divorce on returns to human capital – has a larger absolute coefficient (-0.082) than the "divorce × capital" term. This indicates that divorce indirectly weakens growth more strongly through reduced labor productivity than through reduced capital efficiency. Inflation shows a significant negative effect on growth. Government expenditure also yields a negative coefficient, but this finding is not generalizable and likely follows a nonlinear pattern varying with development levels. In conclusion, family institution instability in the MENA region does not merely disrupt savings; it acts as a productivity shock that degrades human capital quality.