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Economic Impact of Abortion Regulation

July 19, 2019

It has been 46 years since the Supreme Court ruled that access to safe and legal abortion is a constitutional right, but that was only the beginning of the conversation.[1] In the past few months, the appointment of more conservative judges has led to a reenergized effort to pass abortion restrictions and possibly overturn Roe v. Wade. So far, the debate has been emotional and heated, but it has rarely examined the economic impact of restricting abortions.

While a multi-dimensional debate, there are traditionally two schools of thought: pro-life and pro-choice, both of whom associate very different economic costs with the topic. Those who identify as pro-life point to the economic value of children. They also see abortions as a direct correlation to lower populations, making it challenging and costly to care for older generations. Those who identify as pro-choice point to the economic value of personal agency and economic autonomy.

Image: Supportive and anti-abortion U.S. states, 2000 vs. 2019. Source: Wikipedia.Image: Supportive and anti-abortion U.S. states, 2000 vs. 2019. Source: Wikipedia.

In assessing the economic impact of abortions and their restrictions, it is important to first consider why women seek them in the first place. According to the Guttmacher Institute, almost half of the 1,209 abortion patients surveyed did so because they were “not ready for a(nother) child/timing is wrong” (25%) or because they “can’t afford a baby now” (23%).[2][3] Many women who seek out abortions can barely afford the service let alone the costs of maternal care and raising a child which costs $233,610 for the average middle income family.[4] In the U.S., services like Medicaid and Welfare provide help with social services to meet basic human needs for people of lower income brackets. Therefore, those who cannot afford to get an abortion, will need further financial assistance to raise that child, leaving it up to the government to provide assistance through these programs. Because of legislation like the Hyde Amendment, which prohibits states from using money to pay for abortions unless they are the result of rape, incest, or “necessary to save the life of the woman,” abortion services are financed through a combination of out of pocket payments (69%), Medicaid (15.6%), non-Medicaid resources (7.3%), or other methods(8.6%).[5][6] The Hyde Amendment insures that Medicaid cannot be used to cover abortions except in those limited circumstances. This ensures that a miniscule number of abortions are paid for with federal taxes whereas the rest are paid by individual states in programs that match spending on certain services.[7] According to another study by the Guttmacher Institute, U.S. taxpayers save $7 for every dollar the government spends on family planning funds (this includes STI testing), which netted to $13.6 billion in savings in 2010.[8] Yet many politicians including President Trump have called for the defunding of clinics like Planned Parenthood because they provide abortions as one of their many services.[9] During a study of H.R. 3134, the Defund Planned Parenthood Act of 2015, the Congressional Budget Office projected that despite the $520 million in direct savings over 2016-2025 from defunding, the bill would subsequently increase direct spending on extra births and the ensuing children by $650 million during the same period.[10] This nets to a direct spending of $130 million.[11] Another study that examined what happened to women who are denied abortions found that they were more likely to receive public assistance after one year than those who received an abortion. (76% vs. 44%).[12] They were also more likely to be below the Federal Poverty Line (67% vs. 56%).[13]

Image: The costs of raising a child are estimated to be $233,610. Source: USDAImage: The costs of raising a child are estimated to be $233,610. Source: USDA

Abortion restrictions also directly impact women’s access to education and their ability to support themselves financially. The International Labor Office found that the more children a woman has, the more they are affected by the motherhood pay gap. These women are then in turn compensated less than their single counterparts.[14] This disproportionately affected low paid women and caused full-time female workers to earn $1,100 less per child in 200.[15] The same study also found that this gap increased with additional children and persisted even as they got older.[16] In addition to impacting their work lives, unplanned pregnancies affect a woman’s ability to continue their education.[17] Furthermore, according to the Organization for Economic Co-operation and Development who studied gender equality in education, over the past 50 years, increasing access to education for women accounts for about half of economic growth.[18]

The abundance of current legislation that attempts to challenging Roe v. Wade in states like Alabama, Mississippi, Georgia, Ohio, Kentucky and others, costs state governments exorbitant fees as groups continue to block and challenge bills they view as extreme or unconstitutional. While the costs vary depending on how long the legislation is litigated, these sweeping abortions restrictions are seeing lots of opposition. Because of the precedent set in Roe v. Wade, states cannot ban abortion before viability.[19] This makes heartbeat bills, which make abortion illegal as soon as the fetus’ heartbeat can be detected, unconstitutional.[20] Even, the chief legal officer for Americans United for Life, an anti-abortion group, has acknowledged the unlikelihood that these bills persist because as they are in conflict with common laws.[21] John Kasich, the governor of Ohio at the time, also cited the legal costs when vetoing the Ohio Heartbeat Bill (HB 493) in 2016 despite supporting its content saying, “The State of Ohio would be the losing party in that lawsuit (given that the federal courts would strike the bill down) and, as the losing party, the State of Ohio will be forced to pay hundreds of thousands of dollars to cover the legal fees for the pro-choice activists’ lawyers. Furthermore, such a defeat invites additional challenges to Ohio’s strong legal protection for unborn life.”[22] The incremental approach used in the past, was not as costly to states because there was less immediate recourse.[23]

In 2019, nine states have passed abortion laws that either forbid abortions passed a certain point or outlaw them completely. Of those nine, all have incurred immediate backlash from courts.[24] According to Mississippi Attorney General Jim Hood, the state spent $225,940 defending the three abortion-related cases it introduced since 2012 believes that it could exceed $1 million.[25]

Much of the conservative argument centers around the future economic value of unborn children. They have argued that Planned Parenthood’s assessment of savings is incorrect given that it doesn’t calculate the tax payments and other resources the children would give to society in the long term.[26] As of 2017, the average American spent $10,489 in taxes each year.[27] This accumulates to $823,795.571 per person over the average American lifespan of 78.539 years.[28][29] Using the number of abortions that occurred over the same time that the study on government savings was conducted, the government stood to make $8.03 billion (exactly $8,030,913,339).[30]

On the other hand, the calculations of government savings from family planning clinics aggregated to $13.6 billion (this figure includes STI testing) in 2010.[31] While it is impossible to compare these figures given all the other factors involved, it begins to give a sense of the overall economic impact of this controversial issue.

Although abortion debate is largely a moral one, it ignores the costs to women, society, and states. There are often too many variables to directly compare the costs of restricting abortions to allowing them, but most pundits are not looking at the full set of costs anyways. Most are only examining the small set of costs they would associate with their argument, namely the possible economic worth of a child versus the cost to the family and state of raising the child. Despite one’s personal beliefs, it is important to fully understand the economic costs of this prolonged debate in order to make more rational decisions.

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  [7]https://ccf.georgetown.edu/2019/02/28/medicaid-and-state-budgets-checking-the-facts-ye t-again/

  [8]https://www.guttmacher.org/sites/default/files/pdfs/pubs/journals/MQ-Frost_1468-0009.1 2080.pdf


  [10]https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/costestimate/ltrperman entdefundplannedparenthood.pdf




  [14]http://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/@publ/documents/publi cation/wcms_348041.pdf










  [24]https://www.washingtonpost.com/nation/2019/05/09/which-states-are-blocking-abortion- and-which-are-enacting-protections/?utm_term=.0d7b38514dd5

  [25]https://mississippitoday.org/2018/12/20/a-tremendous-amount-cost-of-defending-state-in- abortion-lawsuits-could-soar-past-1-million/





  [30]https://www.guttmacher.org/sites/default/files/pdfs/pubs/journals/MQ-Frost_1468-0009.1 2080.pdf



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