The Economics of Second Trimester Abortions: Market Supply

New research finds that government regulations that restrict the supply of abortions performed after 15 weeks gestation in the state of Texas increased the price of late abortions by 37% ($454) and lead to an increase in the number of unintended births by over 6,600 in the three years following the implementation of the regulation.

While in theory U.S. law allows abortions up until the time at which a fetus is viable outside of the womb, in reality individual state governments have the power to regulate markets in a way that reduces the supply of abortions to women who cannot afford to pay the higher fees.

For those of you who are familiar with the standard economic supply / demand diagram, a government regulation that increases prices is equivalent to a shift of the supply curve along the demand curve. When the supply curve shifts up, prices increase and quantity demanded falls as a result. How much quantity falls, however, depends on how responsive demand for late abortions is to an increase in prices – the slope of late abortion demand curve.

Given what we know from our discussion of market demand for second trimester abortions on Tuesday, we have good reason to believe that the demand curve is probably very flat.

Small changes in the price of a late abortion will have big changes in demand.

The evidence that the over-whelming majority of women having late abortions are living in poverty suggests this is a reasonable assumption to make. Even small increases in price (because women need to travel farther, stay away from their jobs and children longer, and pay higher fees at a clinic) can effectively eliminate the option for women on a very low income to have a late abortion.

Let me give you some background on government regulations that cause this reduction in the supply of late abortions.

In January 2004 the state of Texas implemented the Woman’s Right to Know Act that imposed two major changes on abortions in that state.

The first change required that all women be given information about the alternatives to abortion and a pamphlet that graphically illustrates the growth of a fetus during pregnancy at least 24 hours before her scheduled appointment to have an abortion.

The second change required that abortions performed after 15 weeks gestation are only performed in specially equipped ambulatory surgical centers (ASC).

Not a single abortion provider in the state qualified as an ASC when the law came into effect in January 2004. The immediate effect of the law was to reduce the number of late abortions performed in the state to effectively zero (a very small number of late abortions were still performed in a hospitals). Three years later late abortions could be obtained in four cites, down from nine cities before the regulations came into effect.

When the number of late abortions in one particular state falls, one or more of the following must be true:

According to research by economists Silvie Colman and Ted Joyce, in Texas the new regulations resulted in women choosing the third option. Three years after the policy change the rate of late abortions was 50% of what it had been in 2003. But while many women traveled out of state for this service few were able to substitute for earlier abortions.

Virtually none of the estimated increase in births that stemmed from the law (over 6,600) was due to the new regulation that required women be told their alternatives and see images of fetal development. That regulation may have imposed an emotional cost on women but not to the extent that it changed their decisions to terminate their pregnancies.

The price of an abortion at 20 weeks increased by 37% ($454) more in Texas than in other states between 2001 and 2006, which fails to capture the other costs women have to now incur because of the law.

For example, in the year following the change in laws the distance the average woman had to travel for a late abortion increased from 33 miles to 252 miles. Given that late abortions typically involved a visit to a clinic on two consecutive days, this increase in travel time means that many women would have had to take 3 days off work and away from their families.

Not surprisingly, the biggest increase in unintended births as a result of the law was to teen moms, which was double the increase seen to adult women.

All this suggests that government regulations that restrict supply can profoundly affect the market for late abortions – especially for women who are young and impoverished – and lower the total number of abortions overall.

I have this impression that anti-abortion advocates hear these numbers and imagine 6,600 women lying in their hospital beds cradling their new babies in their arms, surrounded by flowers and teddy bears, and basking in the glory that has been brought to them by Women’s Right to Know Act.

And maybe, for some women, that is exactly what has happened.

But we have ignored all the other costs of the policy change. For example, the welfare costs to women and children – children whose mothers had to pay an additional 2-3 weeks of their family income so that she could have an abortion, children whose mother gave birth when she could not afford another child (or any child), and children who ended up in the foster system as an indirect result of the policy change.

Clearly a follow-up study is needed. After all, if other states want to follow Texas’s lead in light of the apparent effectiveness of this policy they will want to do so in full knowledge of how the law affects the lives of everyone involved.

Reference:

Colman, Silvie and Ted Joyce. (2011) “Regulating Abortion: Impact on Patients and Providers in Texas”  Journal of Policy Analysis and Management Vol 30 No. 4.