Indiana’s special legislative session has caused a number of folks to ask me about the economic impact of restrictive abortion rules. The plain answer is that I don’t know, and cannot really know with the type of certainty I feel comfortable with. The nation has been under one reasonably common set of rules for half a century. Thus, we are just beginning the type of natural policy experiment an economist might use to estimate impacts.
That does not mean we cannot use other policies that might influence the migration of people and jobs as a proxy for how changes to what abortion laws might influence our state’s economy. But, before evaluating the issue, it is important to acknowledge that there are a wide variety of truly principled positions on abortion. One valuable duty of citizenship in our Republic is to respect principled positions and those who hold them.
That does not mean all positions are principled or that many folks will fail to consider competing views in ways that are consistent with the U.S. Constitution. The plain fact is that we’ve been through a half century of cheap rhetoric about abortion. The bill is now due, and I expect it is going to be very steep.
The best study I’ve seen that might inform us about the effects of restrictive abortion laws comes from two economists at Kent State and the University of Akron. Curtis Lockwood Reynolds and Amanda Weinstein estimated gender differences in quality of life preferences in U.S. cities. They used individual data for single, childless adults. They found, that for the most part, men and women like the same things.
Where men and women differed was in their interest in the quality of local government, primarily schools and crime. Men also like some types of recreation more than women. The authors were surprised by one outlier city that men liked and women did not. This small town in Alabama was where Lilly Ledbetter (of the “Fair Pay Act”) lived and worked and was discriminated against.
Their careful data analysis led the authors to study the effect of gender norms on the location decisions of men and women. This is where the study went from “great” to “groundbreaking.” They used all sorts of measures of gender norms, such as the male/female employment ratio, the year of election of the first woman legislator and survey data on gender roles.
Across these measures, both men and women preferred places where gender roles were more equal. But women really, really preferred these places. This is relevant to the economic effects of abortion because, for the past few decades, the places women prefer have grown much faster than the places men prefer. As a happily married man, I fully understand this dynamic. However, this study was on the preferences of single people.
The study offered solid evidence that places with more equal gender norms grew faster than places that were less equal. The growth gap was about 25% over two decades, which is an enormous difference. Their findings also make sense because there is a large body of related research that finds places with less racial or ethnic discrimination grow more quickly.
That fact also challenges any good analysis of the effect of abortion restrictions on a state economy. The reason for this is that the states that are most likely to impose severe abortion restrictions are already significantly underperforming the rest of the nation.
As of this writing, there are 21 states that preemptively banned abortion in case Roe v. Wade was overturned. Three of these states have bans that go into effect after a short waiting period; the remaining 18 were immediate. Four of these states have bans that are currently blocked by courts. It is useful to compare the economic conditions in the states where bans were passed before Roe v. Wade was overturned with those who did not. The results are pretty stark.
In terms of current economic conditions, places with abortion bans in place have a poverty rate of 14% compared to 11.2% in non-ban states. Household income in the abortion ban states averages $75,892 per year, while it is $90,828 in the non-ban states. Both household and per capita incomes in the abortion ban states are 19.6% lower than in the states without a ban.
Future economic prospects in those states with an abortion ban are even worse than current conditions. The high school graduation rate is almost two percentage points lower in the ban, than the non-ban states. That is a meaningful difference, but not insurmountable. However, the share of adults with a college degree is a whopping 6.6% lower in the states with a pre-emptive ban than those without. That is a multi-generational gap.
The states with pre-emptive abortion bans spend 31% less per student in their K-12 system, and 20% less per college student. Finally, population growth in the states with preemptive abortion bans is 26% lower than in states without a ban.
Obviously, preemptive abortion restrictions didn’t cause longstanding differences in economic outcomes between states. Some other factor is limiting economic growth and prosperity in these states. Teasing out the incremental effect of an abortion ban will be nearly impossible given that the states who imposed abortion bans are already underperforming the rest of the nation on nearly every facet of economic vibrancy.
There are many potential hypotheses about the cause of these economic differences. Some of it is random. Wisconsin’s law dates to the 1840s, and was probably known to few residents before last month. In other places, dominant religious groups clearly play a role. Maybe it will take a few years and a couple of election cycles to reveal the real pattern of state abortion laws. What we see right now is vastly different from what we’ll see in a few years.
Whatever happens with this legislation, we are clearly in a time that calls for reflection. The role of government in abortion marks only one part of our need to do some deep thinking about the state’s future.
Michael Hicks is the George and Frances Ball Distinguished Professor of Economics and the director of the Center for Business and Economic Research at Ball State University.
