Treasury Secretary Janet Yellen said restricting
abortion rights could hurt the USeconomy .Women denied abortions are more likely to struggle paying bills and exit the workforce, research shows.
The battle over Roe v. Wade has been framed as a human-rights issue: one about morals, ethics, and religion. That's all true, but abortion is an economic matter, too, as shown by comments from Treasury Secretary Janet Yellen at a Senate banking committee hearing on Tuesday.
Yellen underscored the negative economic impacts of limiting abortion rights in the US, saying it would set women's progress back in the economy. She was likely referring to women's labor force participation rate, wages, and levels of poverty.
"I believe that eliminating the rights 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," Secretary Yellen told lawmakers yesterday.
"One aspect of a satisfying life is being able to feel that you have the financial resources to raise a child," Yellen responded. "This is not harsh. This is the truth," she later added.
On May 2, Politico published a leaked draft opinion from the Supreme Court overturning Roe. The opinion rejects the federal right to abortion and paves the way for upholding restrictive anti-abortion laws in 13 states.
Indeed, overturning Roe v. Wade has wide-reaching financial implications, according to research. Americans denied abortions are more likely to experience poverty, exit the workforce, and raise children in poverty. They are also more likely to rely on social services like Medicaid, the costs of which can be passed on to taxpayers. The decreased labor-participation rate of these women, their financial struggles, and the larger impact on inequality in the US will have ripple effects in the economy, policy experts and economists told Insider.
The stakes are high, as evidenced by the fact that over 150 labor and market experts signed a 73-page amicus brief in favor of upholding Roe v. Wade in September 2021. Jason Lindo was one of them.
"There will be reduced educational attainment, lower employment, and lower levels of income for individuals who do not access abortion because of additional barriers to access. This has obvious implications for the economy," said Lindo, an economics professor at Texas A&M University and a research associate at the National Bureau of Economic Research.
This updated article originally published on May 7.
By the numbers: The economic and financial impact on women
- Women denied abortions are more likely to miss bill payments, experience bankruptcy, and use social services than other women of the same socioeconomic status, per a 2020 study led by a University of Michigan economist and research fellow, Sarah Miller.
- Abortion restrictions cost the US about $105 billion annually due to reduced earnings, increased job turnover, and necessary time off for women between 15 and 44 years old, per a 2021 analysis by the Institute for Women's Policy Research, a think tank that advocates for women from marginalized backgrounds.
- Young women who "utilized legal abortion to delay an unplanned start to motherhood by just one year realized an 11% increase in hourly wages later in their careers," wrote experts in the brief, citing a 2019 study from economist Ali Abboud which was revised in 2020.
Most people seek abortions because of money or career concerns
Multiple independent research studies show that the top reasons people get abortions are to go to work, go to school, or raise one's existing children while not slipping into poverty.
The risks are real. Unplanned births reduce labor-force participation by as much as 25%, according to research by Boston University published in 2010. Americans denied abortions who carried unintended pregnancies to term faced increased rates of late payments on bills, dealings with collection agencies, bankruptcy, and use of social services compared to women of the same socioeconomic status, according to Miller's 2020 study.
"Women who were denied an abortion experience a large increase in financial distress that is sustained for several years," Miller and her colleagues wrote.
It's a concern for many people. The Guttmacher Institute, a reproductive-health research group that supports abortion rights, found in 2014 that almost a quarter of women will have an abortion by the end of their childbearing years, though The New York Times found that the abortion rate among women between the ages of 15 to 44 has fallen in recent years.
"There is an abundance of rigorous research indicating that restricting abortion access should be expected to have detrimental effects on the economic circumstances of women and their families," said Lindo.
Lack of access to abortion means sustained financial distress for families
Miller's research emphasizes that being denied abortion access can result in several years of economic hardship. The cumulative effect puts increased pressure on taxpayer-funded social services like WIC and Medicaid, she told Insider.
"Using social services isn't inherently a problem, it's that if you don't have control over when you have a child, you're going to be more at risk for really bad financial instability and not being able to be financially self-sufficient," Miller said.
Financial distress also harms the person's children as they grow up. Children who grow up poor are more likely to experience poverty as adults, and the likelihood of that increases with each year, according to a 2009 study by the National Center for Children in Poverty at Columbia University.
"Growing up in a poorer household leads to poorer long-run outcomes that will be realized when they become adults themselves," Lindo said. "There are intergenerational effects."
The Institute for Women's Policy Research estimated in 2021 that abortion restrictions cost the US about $105 billion annually due to reduced earnings, an impact on labor-force participation, increased job turnover, and time off for women of childbearing age.
"We certainly saw that Roe impacted women and their families. And I think we're likely to see an impact of its reversal," Caitlin Myers, an economist at Middlebury College, previously told Insider.
Declining labor-force participation and increased poverty reduces GDP
Increased restrictions on abortion has already hit the American economy. The "annual cost of unintended pregnancy in the US increased from a 2011 cost of $4.6 billion to $5.5 billion in 2018," a 2019 study by RTI Health Solutions found.
"The true economic burden is likely higher when factoring childcare and indirect costs," the authors of the study wrote.
At the same time, lower fertility — an effect of access to abortion — increases women's labor supply and contributes positively to GDP, according Harvard University research from 2009.
Emily Martin, the vice president for education and workplace justice at the National Women's Law Center, told Insider that not having access to abortion doesn't just hurt the person seeking the abortion, but their children and families as well.
"What happens at the Supreme Court will have a rippling effect on businesses, on state and local economies, on families, and those families also include men," C. Nicole Mason, the CEO of the Institute for Women's Policy Research, said.
Banning abortion increases economic inequality
Young women and women of color, specifically Black and Hispanic women, will be most impacted if Roe v. Wade is overturned.
In Mississippi, for example, 77% of women who receive abortions are Black or Hispanic, and 20% are white, according to the Kaiser Family Foundation, a nonpartisan health nonprofit. In Texas, 67% of women receiving abortions are Black or Hispanic while 26% are white.
"The women who will be most impacted by these bans are those who are already economically vulnerable: women of color, hourly wage workers, workers without paid sick leave or time off," Mason said.
Americans in several of the 13 so-called trigger-law states would have to drive several hours, or even days, or take an airplane to access abortion services, Mason noted. This can be prohibitive for people who work low-wage jobs, who don't have paid time off from their employers, or who simply cannot afford it. This will have a racialized effect: Black and Hispanic women are overrepresented in low-wage jobs and are more likely to make less money than white people.
To get even more specific, an increase in travel distance of up to 100 miles to get an abortion increases birth rates for women aged 20 to 24 by 3.4%, and 1.4% for women aged 25 to 29. That travel distance increases birth rates for Black women by 3.3%, compared to an increased birth rate of 2.1% for white women, a 2021 study by Middlebury College found.
"Given that the women affected tend to be disproportionately low-income, these effects may serve to further reinforce or exacerbate existing economic inequalities," Miller's 2020 study said.
Research by Ali Abboud, an economics professor, shows that abortion access helps women economically.
"I think this is one of the darkest days in American democracy that we've seen in the last 50 years," Mason said. "And it is not in alignment with our values here in the US of freedom and liberty for all."