The Effect of Family Planning Programs on the Fertility of Welfare Recipients: Evidence from Medicaid Claims
Previous studies of U.S. publicly funded family planning services have produced conflicting and sometimes confounding results. These studies have relied exclusively on single-equation estimates of family planning program effectiveness. Economic theories suggest that single-equation estimates may understate program effectiveness when the same unobserved variable affects both the fertility outcome and contraceptive behavior. To eliminate the bias that may result from single-equation estimation, I use a bivariate probit model to estimate the effect of contraceptive acceptance on the individual's probability of giving birth. I employ a unique data set created from Maryland Medicaid claims records. Results from bivariate probit estimation show that contraceptive acceptance plays a much larger role in reducing fertility than single-equation estimates would suggest.
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