What does Janet Yellen know about the economic effects of abortion?

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What does Janet Yellen know about the economic effects of abortion? A lot, actually.

When it comes to members of the Biden administration who would speak out on abortion rights in the wake of the leaked Supreme Court opinion — which, if it goes into effect, would overturn Roe v. Wade — in a way that would lead to a tussle with a conservative media outlet, you might think it would be Vice President Kamala Harris, or maybe current and former White House spokespeople like Jen Psaki or Karine Jean-Pierre, but probably not the current Treasury secretary, Janet Yellen. But while abortion is a deeply personal medical issue, it’s also one with broad implications for the economic and social status of American women.

“I believe that eliminating the right of women to make decisions about when and whether to have children would have very damaging effects on the economy and would set women back decades,” Yellen said last week.

Her statement received a lot of pushback from opponents of abortion and caused the Wall Street Journal to write an editorial saying, “Ms. Yellen overlooks the lost productive contribution of children who were never born. People are assets, the source of inventions and new businesses. Human capital is crucial to economic growth and a dynamic society.”

Yellen, as it happens, is no tourist in the economics of reproductive technology. She is the co-author of one of the most influential papers on the social effects of abortion and contraception. The Supreme Court handing down Roe v. Wade, along with the development and legalization of effective forms of contraception, offered something of a natural experiment for the paper’s authors to study what happens when women suddenly have power over whether they get pregnant.


The paper found that, somewhat counterintuitively, this technological and social shift was actually responsible for a portion of the dramatic rise in births to unmarried women. While this may seem odd — after all, abortion and contraception have been linked to declining fertility, and advocates for legalized abortion predicted a decline in out-of-wedlock childbirth as a result — whether a child is born is only part of the equation of whether their parents are married. By changing how people related to sex, specifically by breaking the implied commitment between sex and marriage in the case of pregnancy, increased access to the full range of family planning tools could lead to a higher portion of births happening outside of marriage even if women had fewer children overall.

These days, you’re more likely to see that work cited in the National Review than Mother Jones. Yellen’s work has been cited by anti-same-sex-marriage campaigner Maggie Gallagher, the conservative Institute for Family Studies, research done by the Joint Economic Committee under the auspices of conservative Utah Sen. Mike Lee, and, multiple times, in a brief to the Supreme Court by over 200 conservative women — and it doesn’t show up at all in a brief put together by a group of economists in support of Roe. While the paper has been quite influential and well-cited, it tends to show up more in literature about single parenthood, not abortion.

“It’s been every social conservative’s ersatz favorite social science paper, the secret knowledge that was passed down from one from to the next,” said Patrick Brown, a fellow at the conservative Ethics and Public Policy Center. “In some respects, it’s a very traditional social conservative result.”

It’s also one that Kelly Jones, an economist at American University who studies the economics of reproduction, said is “the type of speculation that is hard to disagree with,” but was lacking in direct evidence, noting that the economics field has changed dramatically since the 1990s and made major strides in more precisely identifying the causal effect of policy changes.

But as Yellen, George Akerlof and Michael Katz argued in their original paper and as both Brown and Jones agreed in interviews, overturning Roe will not “put the genie back in the bottle” when it comes to the sexual revolution, and what effects it will have are, of course, unknown considering the court has not officially come to a decision. But there are hints in the existing research.


Roe happened in a time when a lot of things were changing

It’s important to remember that Roe v. Wade was decided in a very different economic and medical moment in the United States. The birth control pill was only 13 years old, and the court had decided that laws prohibiting married couples from using contraception were unconstitutional only eight years prior in Griswold v. Connecticut. Women’s labor force participation was 44 percent compared with 57 percent today. (It peaked at around 60 percent in the late 1990s.) Women’s wages were about 57 percent of men’s, compared with 82 today. Though women still pay a price for parenthood — studies estimate mother’s wages take a hit of $16,000 compared with fathers — before the sexual revolution took hold, many more women simply dropped out of the labor force when they had children.

But when Roe and Griswold landed, it dramatically changed women’s ability to work at all and to advance in their chosen fields. Research by economist Martha Bailey found that “access to the pill before age 21 reduced the likelihood of becoming a mother before age 22 by 14 to 18 percent and increased the extent of 26 to 30 year old women’s labor-force participation by approximately 8 percent,” for women born between 1940 and 1955. Research by Harvard economists Claudia Goldin and Lawrence Katz found that more women entered professional education programs and delayed marriage starting in 1970, which they linked to the diffusion of the pill along with liberalization of laws around its use.

Research by Caitlin Myers, a Middlebury College economist, has found a stronger role for abortion in the demographic and economic revolution for American women, specifically that “policy environments in which abortion was legal and readily accessible by young women are estimated to have caused a 34 percent reduction in first births, a 19 percent reduction in first marriages, and a 63 percent reduction in ‘shotgun marriages’ prior to age 19.”

But abortion policy did not cease changing with Roe. In 1992, the court both reaffirmed Roe in its Planned Parenthood v. Casey decision — citing, among other things, how “the ability of women to participate equally in the economic and social life of the Nation has been facilitated by their ability to control their reproductive lives” — but also cleared the way for abortion restrictions that did not place an “undue burden” on people attempting to get abortions.

With Casey came a raft of laws that, either by design or coincidence, reduced the number of abortions, either by making people less likely to go through with abortions they might have wanted — like requiring parental notification or consent for minors seeking the procedure — or the ability of providers to perform them — like mandates on hallway width or requirements for admitting privileges to local hospitals. These supply-based restrictions, known as “targeted regulations of abortion providers” or TRAP laws, can result in clinics closing and abortion access decreasing. In research by American University’s Jones and Mayra Pineda-Torres, these rules have been linked to fewer abortions, more teen births, and less college attendance and college completion, especially for Black women living in states that have TRAP laws in effect before they turn 18.


In much of the research on abortion and contraception, Jones told Grid, Black women tended to benefit more from liberalized abortion and white women from contraception. Conversely, unwanted pregnancy tends to have more negative effects on the educational attainment and economic prospects of Black women, Jones said — which Yellen echoed in her Senate testimony — although it can be difficult to disentangle whether it’s socioeconomic status or race that’s driving the disparity.

“The differences in findings by race are at least partly driven by poverty,” Jones said. “Certainly economic disadvantages are playing a role, we already know from a lot of economic studies when you reduce access to abortion that affects Black women’s use more than white women’s.”

In any case, a legal, technological and social revolution occurred in the 1960s and 1970s, after which women were more likely to work, earned higher wages and, if they got pregnant, were more likely to raise their children as single mothers.

This last effect was one of the leading policy issues of the 1990s. The so-called feminization of poverty was central to the debate over welfare reform — for conservatives and some Democrats, including those in the White House, the design of Aid to Families with Dependent Children, the program typically known as “welfare,” encouraged single motherhood and discouraged women from working, trapping them and their families in poverty.

For opponents of welfare reform, this analysis got things exactly backward; single moms and their children were the most needy recipients of aid — or as Yellen and Akerlof put it, “the support of poor children not the alteration of the behavior of potential mothers should remain the major policy goal of welfare in the United States.” The conundrum remained that, by the 1980s and 1990s, the ability to control and plan pregnancy was not perfect, but it was possible, and yet a rising proportion of births were happening in circumstances that were linked with impoverishment.

Akerlof, Yellen and Michael Katz, a trio of economists affiliated with the University of California, Berkeley, who were or would be, respectively, a Nobel laureate, the chair of the Federal Reserve and the chief economist of the Federal Communications Commission, argued that the major factor driving single motherhood was the precipitous fall in shotgun marriages. Women didn’t entirely stop getting pregnant before marriage, but they were much less likely to get married after getting pregnant.

“Sexual activity without commitment is increasingly expected in premarital … since their male partners do not have to assume parental responsibility in order to engage in sexual relations,” the three wrote, explaining one model of how increased control over pregnancy led to more out-of-wedlock births. By changing the social expectations around sex, reproductive technology like abortion and the pill changed what commitments women could get from men they had sexual relationships with.

For women who didn’t choose to, couldn’t use properly or didn’t have access to contraception or abortions, they were faced in a conundrum in the post-sexual-revolution world: have sex with a man but be likely to end up raising any resulting children by yourself. “In the old world, before the sexual revolution, women were less free to choose, but men were expected to assume responsibility for their welfare, an expectation that was more often fulfilled than breached. Nowadays women are freer to choose, but men are affording themselves the comparable option” the three wrote.

The paper has not gone unnoticed in the subsequent literature, although economists tend to be more skeptical of its claims than social conservatives who have gleefully adopted it. Elizabeth Oltmans Ananat and Daniel M. Hungerman, in their own research on how oral contraception affected the generation of children whose parents had access to it, wrote that the “evidence for Akerlof, Yellen, and Katz’s model is mixed” — their research showed “contraception access leads to an increase in mothers who have never been married,” but also “decreases the share of divorced mothers,” because contraception allows women to delay childbirth and find more suitable matches.

Conservatives have taken the parts of the paper they like

For years, single motherhood has largely been coded as a conservative issue. While the tone has evolved from condemnatory to conciliatory since the 1990s (and now even conservatives are generally careful to call it single parenthood), it’s largely Republicans promoting policy initiatives like marriage promotion, emphasizing the importance of the “success sequence” (the idea that life outcomes will be better if people graduate from high school, get married and then have children) or as, Mike Lee did, using their chairmanship of important Senate committees to producing footnote-laden reports on “The Demise of the Happy Two-Parent Home.”


But a world where abortion is formally or effectively banned in large swathes of the country is one where these questions turn from the stuff of think tank reports to literally life and death policy decisions. A post-Roe world will not make America 1950 again, but for many women, especially lower-income women in the South and Midwest, they could take pregnancies to term that, today, they would be able to terminate.

Justice Samuel Alito’s draft opinion pleads agnosticism on the economic questions raised by abortion, instead saying that Casey’s claim that women had relied on the protections granted by Roe were “novel and intangible” and depended “an empirical question that is hard for anyone … to assess, namely the effect of abortion on society and in particular the lives of women.” Alito pointed to the fact that supporters and opponents of abortion rights had filed briefs and noted that, if abortion were to be decided by state legislatures, “women are not without electoral or political power.”

But there’s little doubt overturning Roe will have some economic effects, even if the scope of them is still unknown.

“It’s something that should cry out for action if economic pressures are pushing women to consider abortion. There’s a lot of factors that go into that decision to the extent that economics factors can be alleviated. Conservatives have a responsibility to take those questions seriously,” Brown said.

Thanks to Lillian Barkley for copy editing this article.

  • Matthew Zeitlin
    Matthew Zeitlin

    Domestic Economics Reporter

    Matthew Zeitlin is an economics reporter at Grid focused on the domestic impact of major stories such as coronavirus, the supply chain and economic volatility.