Econometric analyses of U.S. abortion policy: a critical review.

INTRODUCTION Few social issues in the United States are as contentious as the legal status of induced abortion. Thirty years after the Supreme Court declared state laws restricting abortion unconstitutional in Roe v. Wade, (1) poll results suggest that the United States population is almost evenly split over whether the next nominee to the Supreme Court should support or oppose legal abortion in most or all contexts. (2) The salience of the issue is arguably among the highest of all national issues. (3) The motivation behind many individuals' positions regarding abortion policy hinges on normative judgments. That is, many people arrive at their abortion position based on some moral decision about the relative rights of the mother and the fetus. (4) Presumably there is a consequentialist component to the abortion question that is largely ignored in discussions of public opinion about abortion. (5) This consequentialist component, however, has received the bulk of attention in the social science literature regarding abortion policy. The social science literature on the effects of abortion policy has grown tremendously during the last decade. While public health and demographic scholars had consistently examined the effects of changes in abortion policy even before Roe, (6) there has been an explosion of research on the subject in economics journals in recent years. While a few of these articles are primarily theory based, (7) the lion's share of the increase in attention devoted to this subject has come in the form of econometric or statistical analyses of changes in abortion policy. In many ways, changes in abortion policy, especially the issue of legalization, present empirical researchers with an ideal mechanism through which to identify causal relationships between changes in incentives relating to sexual behavior and a host of demographic and public health outcomes. The costs and benefits of sexual behavior are subjective and are likely to be correlated with many observable and unobservable individual characteristics. This makes it difficult to draw causal inferences about the sensitivity of sexual behavior to incentives. Even if data are available on the costs and benefits of sexual behavior accruing to an individual, a fairly heroic assumption in most contexts, any observed correlations between behavior, or outcomes and changes in those costs and benefits might very well be artifacts of omitted variables biases. (8) Changes in abortion policy, however, generally affect costs and benefits of sexual behavior in known and unambiguous ways. Further, since the changes are generally the result of legislative action or judicial fiat, they are likely to be exogenous. That is, the changes will be orthogonal or unrelated to an individual's characteristics, obviating the concern that the changes in costs and benefits will be correlated with important variables that are omitted in the econometric analysis. (9) Econometric researchers have exploited this attractive aspect of changes in abortion policy to examine numerous important social and demographic relationships. These include the effect of incentives on sexual activity, and the effect of limiting unwanted births on welfare payments, crime rates, and women's educational attainment, as well as the direct effect of changes in abortion policy on abortion and fertility decisions. Setting aside the rights-based arguments for and against abortion availability, these positive analyses have large implications for the evaluation of abortion policy. A sophisticated understanding of what econometric research tells us about the effects of abortion policy could greatly improve social welfare by informing policymakers about the consequences of their actions. Unfortunately, the econometric literature on this topic is technical, placing it beyond the ken of most policymakers. Further, some media popularizations of research in this field have been influenced by the various groups who have a vested interest in seeing abortion policy swayed in one direction or another. …