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Abortion as Insurance

  • Phillip B. Levine
  • Douglas Staiger

This paper views abortion access as an insurance policy that protects women from unwanted pregnancies. Within this framework, we present a theoretical model where greater access provides value in the form of insurance against unwanted births and also reduces the incentive to avoid pregnancy. This model predicts that legalized abortion should lead to a reduction in the likelihood of giving birth. It also predicts that if abortion access becomes relatively inexpensive (including both monetary and psychic costs), then pregnancies would rise and births would remain unchanged or may even rise as well. We review the evidence on the impact of changes in abortion policy mainly from the United States and find support for both predictions. Then we test these hypotheses using recent changes in abortion policy in several Eastern European countries. We find that countries which changed from very restrictive to liberal abortion laws experienced a large reduction in births, highlighting the insurance value. Changes from modest restrictions to abortion available upon request, however, led to no such change in births despite large increases in abortions, indicating that pregnancies rose as well. These findings are consistent with the incentive effect implications of our model.

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File URL: http://www.nber.org/papers/w8813.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8813.

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Date of creation: Feb 2002
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Handle: RePEc:nbr:nberwo:8813
Note: CH HC HE
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  1. Blank, Rebecca M. & George, Christine C. & London, Rebecca A., 1996. "State abortion rates the impact of policies, providers, politics, demographics, and economic environment," Journal of Health Economics, Elsevier, vol. 15(5), pages 513-553, October.
  2. Coelen, Stephen P & McIntyre, Robert J, 1978. "An Econometric Model of Pronatalist and Abortion Policies," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 1077-1101, December.
  3. Gary S. Becker, 1960. "An Economic Analysis of Fertility," NBER Chapters, in: Demographic and Economic Change in Developed Countries, pages 209-240 National Bureau of Economic Research, Inc.
  4. Schultz, T Paul, 1973. "A Preliminary Survey of Economic Analyses of Fertility," American Economic Review, American Economic Association, vol. 63(2), pages 71-78, May.
  5. Janet Currie & Lucia Nixon & Nancy Cole, 1993. "Restrictions on Medicaid Funding of Abortion: Effects on Pregnancy Resolutions and Birth Weight," NBER Working Papers 4432, National Bureau of Economic Research, Inc.
  6. Lundberg, S. & Plotnick, R.D., 1994. "Adolescent Premarital Childbearing: Do Economic Incentives Matters?," Discussion Papers in Economics at the University of Washington 94-4, Department of Economics at the University of Washington.
  7. Kane, Thomas J & Staiger, Douglas, 1996. "Teen Motherhood and Abortion Access," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 467-506, May.
  8. Theodore Joyce & Robert Kaestner, 1995. "State Reproductive Policies and Adolescent Pregnancy Resolution: The Case of Parental Involvement Laws," NBER Working Papers 5354, National Bureau of Economic Research, Inc.
  9. Deborah Haas-Wilson, 1996. "The Impact of State Abortion Restrictions on Minors' Demand for Abortions," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 140-158.
  10. Jonathan Gruber & Phillip Levine & Douglas Staiger, 1999. "Abortion Legalization And Child Living Circumstances: Who Is The ''Marginal Child''?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 263-291, February.
  11. Theodore J. Joyce & Naci H. Mocan, 1989. "The Impact of a Ban on Legalized Abortion on Adolescent Childbearing in New York City," NBER Working Papers 3002, National Bureau of Economic Research, Inc.
  12. Willis, Robert J, 1973. "A New Approach to the Economic Theory of Fertility Behavior," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S14-64, Part II, .
  13. Cook, Philip J. & Parnell, Allan M. & Moore, Michael J. & Pagnini, Deanna, 1999. "The effects of short-term variation in abortion funding on pregnancy outcomes," Journal of Health Economics, Elsevier, vol. 18(2), pages 241-257, April.
  14. Rebecca M. Blank, 2001. "What Causes Public Assistance Caseloads to Grow?," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 85-118.
  15. Matthews, S. & Ribar, D. & Wilhelm, M., 1995. "The Effects of Economic Conditions and Access to Reproductive Health Services on State Abortion and Birth Rates," Papers 4-95-15, Pennsylvania State - Department of Economics.
  16. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
  17. Becker, Gary S & Lewis, H Gregg, 1973. "On the Interaction between the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S279-88, Part II, .
  18. Robert L. Ohsfeldt & Stephan F. Gohmann, 1994. "Do Parental Involvement Laws Reduce Adolescent Abortion Rates?," Contemporary Economic Policy, Western Economic Association International, vol. 12(2), pages 65-76, 04.
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