Abortion as Insurance

Phillip Levine and Doug Staiger

No 8813, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

JEL-codes: I18 J13 (search for similar items in EconPapers)
Date: 2002-02
New Economics Papers: this item is included in nep-hea, nep-ias and nep-mic
Note: CH EH
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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