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The Economics of Legal Abortions

Roe Vs. Wade and its understated significance.

On the 24th of June 2022, the U.S Supreme Court overruled the historic 1973 Roe vs Wade case. This ruling has been a cornerstone for the advancement of women’s reproductive rights, deeming access to abortion to be a constitutional right of the people.

This has not exclusively been a debate of ethics, but also that of economic consequences too. In their 2001 paper, Donohue and Levitt highlight one of the many unintended economic consequences of legal access to abortion. For context, the US was experiencing an alarmingly rapid increase in crime rates throughout the 70s and 80s posing a massive issue to policymakers. Miraculously, however, heading into the mid-90s the nation saw a sharp fall in these figures[1]. While puzzling for many, Donohue and Levitt argued that this unexpected decline was, in part, caused by the Roe vs Wade case in question that took place nearly 20 years previously.

The authors hypothesised that an increased ability to control family size led to fewer children being born into ‘high-risk’ conditions associated with a greater chance of participation in criminal activity. Considering studies have cited that around 40% of women have abortions for financial reasons[2], this is pretty intuitive, as these higher risk groups are typically associated with higher rates of single-motherhood and lower socio-economic status. Thus, Donohue and Levitt’s results concluded that crime was approximately ‘15-25% lower in 1997 than it would have been absent of legalised abortion,’[3] who would’ve thought?

However, the methodology of this paper has been scrutinised, as with many economic papers on crime. Principally due to the fact that successfully isolating the effect of access to abortion on delinquency rates would be extremely difficult. It would entail controlling for all variables that correlate with the decision to partake in criminal activity, including innately unquantifiable factors such as psychological determinants[4]. Generally speaking, other economic implications of legal access are far more clear-cut, although equally as important.

Educational attainment and labour market outcomes.

Increased rates of unplanned parenthood have significant impacts on a number of economic indicators, specifically for the female demographic. An important mechanism of the effects of abortion access on educational attainment and subsequent labour market outcomes is through the reduction of teenage fertility rates. Angrist and Evans (1996) estimated that the state abortion reforms of the 1970s reduced teenage pregnancy rates for white and black women by 5% and 10% respectively[5].

This reduction in fertility rates for this specific demographic correlates with greater educational attainment, increasing the ability of women to achieve degrees and participate in the labour market[6], with these impacts tending to be more highly concentrated for single black women[7].

Not only would the negative impacts of abortion restriction directly affect these individuals, but they inadvertently extend to their children, creating a generational transfer of adverse outcomes. Without the law reform stemming from Roe vs Wade, Gruber et al. estimate that the ‘marginal child’ (one that would have been born if not for the reform) would have been ‘70% more likely to live in a single-parent family, 40% more likely to live in poverty, 50% more likely to receive welfare, and 35% more likely to die as an infant’[8] compared to the baseline. Beyond this, these children themselves are statistically more likely to become teenage parents, observe greater rates of adult unemployment, and worsened educational achievement[9]. Thus, the cycle of harm perpetuated itself, all originating from reduced access to abortion.

Fiscal impacts

Given the known fact that financial reasons are one of the most significant reasons for needing an abortion, it is intuitive that with a restricted ability to plan parenthood, the demand for Government aid is bound to increase drastically. This is difficult to predict, however, some sort of idea can be generated from Michigan’s 1988 decision to ban abortions from Medicaid funding. With the purpose of Medicaid being to help those on low incomes who are unable to afford medical insurance without assistance, this policy seemed to lack much long-term cost-benefit economic analysis. Evans et al. (1992) find that despite the initial $6-7 billion savings of the state from the birth cohort of 1991, this figure is dwarfed by the estimated $50.2-137.4 billion in incremental costs of state support required due to this decision[10]. Gruber et al. estimate similar results of costs saved due to the legalisation of abortion post-1973, finding that the original case saved the government over ‘$14 billion in welfare expenditures through 1994’[11]. It is irrefutable that such policies are by nature regressive, impacting those on the lowest incomes, and other marginalised groups in society the most.

As stated by Caitlin Myers, an Economics professor specialised in the areas of gender, race, and the effect of reproductive rights, economists tend to disagree on almost everything, yet, this theme is not something that can be seen when discussing rights to abortions. It is undeniable that granting people the ability to control their family size has positive economic repercussions for those specific individuals within society, especially women, but also for society as a whole. In a society self-titled as the ‘Land of the Free,’ how can the restriction to basic medical care and controlling of female bodily rights in the US be seen as a step forward in the progression for economic and moral equality?


Edited and Reviewed by Tanish Bagga.


References/ Further Reading: [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11]

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