Essays on economic aspects of abortion in the united states

EFFECT OF PROVIDER SUPPLY ON THE DEMAND OF ABORTION 14 2.1 Introduction 14 2.2 Abortion Legislation and Structure of the Abortion Market 17 2.3 Previous Research on Provider Availability

BY SARA BORELL1 B.A., University of Verona, 2001 M.Sc, Collegio Carlo Alberto, 2002 M.A., University of Cergy Pontoise, 2003

M.A., University of Illinois at Chicago, 2006

THESIS Submitted as partial fulfillment of the requirements

for the degree of Doctor of Philosophy in Economics

in the Graduate College of the University of Illinois at Chicago, 2011

Chicago, Illinois

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I am especially grateful to my supervisor, Robert Kaestner, for his support and supervision over the past years 1 could have not accomplished this dissertation without him I am also grateful to the other members of my dissertation committee Nathan Anderson, Barry Chiswick, Theodore Joyce and Anthony

Lo Sasso for their feedbacks on my research and encouragement

Many people contributed in important ways to the completition of my graduate studies My parents, Franca and Gigi Borelli, and the rest of my family have been an essential source of support over the years They have been always present with their love and encouragement giving me the strength to go

on Special thanks go to Rosa Berardi, a dear friend, for hosting me at her house I really felt I have found another family on the other side of the world

My thanks extend to my Italian friends who always supported me, especially Lidia Monaco, and

to my UIC classmates for sharing very difficult times on the way Above all, heartfelt gratitude goes to Davide Furceri for always being beside me with his love, understanding, patience and encouragement, sharing this experience with me from the beginning to the end

SB

IV

CHAPTER PAGE

1 INTRODUCTION 1

1.1 Background 1

1.1.1 Review of Abortion Legislation 2

1.2 Purpose of the Study and Contributions 6

2 EFFECT OF PROVIDER SUPPLY ON THE DEMAND OF ABORTION 14

2.1 Introduction 14

2.2 Abortion Legislation and Structure of the Abortion Market 17

2.3 Previous Research on Provider Availability 21

2.4 Conceptual Framework 25

2.5 Data 30 2.6 Empirical Specification 37

3.2 Theoretical Impact of Parental Involvement Laws on Adult Fertility 69

3.3 Brief History of Abortion Parental Involvement Laws 71

3.4 Previous Research 76

3.4.1 Studies of Current Impact of Parental Involvement Laws 76

3.4.2 Previous Research on the Long Term Effects of Changes in Costs of Fertility Control 84

3.5 Empirical Specification 88

3.6 Data 89 3.7 Results 93

TABLE PAGE

I ABORTIONS BY STATE OF OCCURRENCE, NCHS AND AGI 32

II VARIATION IN DISTANCE BY POPULATION DENSITY 37

III DESCRIPTIVE STATISTICS 40

IV EFFECT OF DISTANCE ON ABORTION RATES 42

V EFFECT OF DISTANCE -DUMMIES-ON ABORTION RATES 43

VI EFFECT OF PROVIDER RATE ON ABORTION RATES 44

VII EFFECT OF DISTANCE ON ABORTION RATES BY MARITAL

X EFFECT OF DISTANCE TO A LARGE PROVIDER 53

XL EFFECT OF DISTANCE ON ABORTION RATES-COUNTIES WITH DISTANT

PROVIDERS 55 XII EFFECT OF DISTANCE ON ABORTION RATES-OLDER WOMEN 60

XIII FIRST STAGE REGRESSION 61

XIV EFFECT OF DISTANCE ON ABORTION RATES-OLDER WOMEN-COUNTIES

WITH POPULATION DENSITY < 300 RESIDENTS PER SQ MILE 62

XV FIRST STAGE REGRESSION COUNTIES WITH POPULATION DENSITY < 300

RESIDENTS PER SQ MILE 63 XVI ABORTION RESTRICTIONS-PERIODS ENFORCED 75

XVII EFFECT OF EXPOSURE ON NUMBER OF CHILDREN PER WOMAN -WHITES 95

XVIII EFFECT OF EXPOSURE ON NUMBER OF CHILDREN PER WOMAN -BLACKS 96

XIX EFFECT OF EXPOSURE ON COMPLETED HIGH SCHOOL - WHITES 99

vii

TABLE PAGE

XX EFFECT OF EXPOSURE ON COMPLETED HIGH SCHOOL-BLACKS 100

XXI EFFECT OF EXPOSURE ON SOME COLLEGE - WHITES 101

XXII EFFECT OF EXPOSURE ON SOME COLLEGE-BLACKS 102

XXIII EFFECT OF EXPOSURE ON WHETHER WORKED LAST YEAR-WHITES 103

XXIV EFFECT OF EXPOSURE ON WHETHER WORKED LAST YEAR-BLACKS 104

XXV EFFECT OF EXPOSURE ON EMPLOYED - WHITES 105

XXVI EFFECT OF EXPOSURE ON EMPLOYED-BLACKS 106

XXVII EFFECT OF EXPOSURE ON NUMBER OF CHILDREN PER WOMAN

WHITES-LOW MIGRATION STATES 109 XXVIII EFFECT OF EXPOSURE ON COMPLETED HIGH SCHOOL

WHITES-LOW MIGRATION STATES 110

XXIX EFFECT OF EXPOSURE ON SOME COLLEGE

WHITES-LOW MIGRATION STATES 111

XXX EFFECT OF EXPOSURE ON WHETHER WORKED LAST YEAR

WHITES-LOW MIGRATION STATES 112 XXXI EFFECT OF EXPOSURE ON EMPLOYED -WHITES

LOW MIGRATION STATES 113 XXXII DATA SOURCES 129 XXXIII EFFECT OF DISTANCE ON ABORTION RATES, ALL ARA COUNTIES 130

XXXIV EFFECT OF PROVIDER RATES ON ABORTION RATES BY COUNTY OF

OCCURRENCE 132 XXXV EFFECT OF DISTANCE ON ABORTION RATES - OLDER WOMEN -

COUNTIES WITH POPULATION DENSITY < 100 RESIDENTS PER SQ MILE 133

XXXVI FIRST STAGE REGRESSION COUNTIES WITH POPULATION

DENSITY < 100 PER SQ MILE 135

VIM

TABLE PAGE XXXVII EFFECT OF EXPOSURE ON NUMBER OF CHILDREN PER WOMAN

WHITES-ALL CELLS 136 XXXVIII EFFECT OF EXPOSURE ON NUMBER OF CHILDREN PER WOMAN

BLACKS-ALL CELLS 137

PAGE National abortion rate 1973-2005 7 Number of abortion providers 1973-2005 8

States with Parental Involvement laws in effect as of February 2011 11

Probability of provider in county and county population 20

Probability of provider in county and county population density 21

Abortion costs and probability of abortion given pregnancy 29

Abortion costs and probability of pregnancy 29

Abortion costs and probability of abortion 30

Trends in abortion rates, thirteen states area and national trends 33

Total, hospital and non-hospital providers 1973-2005, 50 states-AGI data 35

Counties experiencing a change in distance to the nearest provider, 1979-1988 36

Counties experiencing a change in distance to the nearest large provider, 1979-1988 36

Impact of Parental Involvement laws on Fertility 71

Number of states with minors' abortion restrictions, 1973-2011 74

Own children in the household and children ever born (CEB) per woman 91

x

AFDC Aid to Families with Dependent Children

AGI Alan Guttmacher Institute

ARA Abortion Reporting Area

BEA Bureau of Economic Analysis

CDC Center of Disease Control

CEB Children Ever Born

IV Instrumental Variables

MPC Model Penal Code

NCHS National Center of Health Statistics

NCI National Cancer Institute

OLS Ordinary Least Square

PI laws Parental Involvement laws

After nationwide abortion legalization in 1973, government policies continued to change becoming, in general, less favorable to abortion and accessibility of providers started to decline in the early 1980s This research analyses the impact of some of these changes on abortion demand The first chapter provides some background about abortion in the U.S., in particular the legal issues and framework that serve as reference to place the results of subsequent chapters into context It also describes the purpose of the study and its contributions

Chapter two examines how changes in accessibility to abortion providers have affected abortion rates in the U.S in the 1980s The analysis of accessibility to abortion providers is important because the supply of services in this market has been traditionally uneven and restricted compared to other medical services State level regulations, violence against providers and stigma impose burdensome constraints on the provision of abortions and may help to understand both the change in the number of providers over time and their geographical distribution While some previous research has examined the association between abortion availability and abortion rates, these studies have been limited in their ability to provide estimates of a causal relationship This is the first study to use a large panel of counties and a fixed effects approach to obtain robust estimates of the impact of changes in provider availability on abortion demand Furthermore, I analyze the effect of changes in abortion services on different groups of women distinguished on the basis of demographic characteristics which can signal different behavioral responses The chapter also addresses the simultaneity problem in the demand and supply of abortion services by means of an instrumental variable approach The results show that availability of abortion services is strongly correlated with abortion rates over the sample period considered The estimates are robust to a wide range of specifications and the instrumental variable results suggest that the observed correlation between abortion rates and provider availability can be plausibly interpreted as causal

The second part of the dissertation (chapter three) analyses the long term impact of abortion Parental Involvement laws for minors Starting in the early 1980s, states instituted laws such that minors

xii

were required to either notify a parent(s) or obtain their consent before receiving an abortion Together, these laws are referred to as Parental Involvement laws Today, the majority of states require some form

of parental involvement in minors' abortions Previous research on parental laws has focused on the run impact on abortion behavior of minors, and to a less extent births But the effect of parental involvement laws may go beyond the short-run and affect a woman's in the long-run In fact, the timing

short-of first birth (a teen birth) may influence subsequent education choices, marriage, and other factors that influence fertility Thus, the purpose of this project is to investigate whether parental laws have impact on fertility and other socioeconomic outcomes in the long-run The research design exploits the fact that states enacted Parental Involvement laws at different times to identify cohorts that have been more or less exposed to abortion restrictions as minors The results show that women who were more exposed to abortion restrictions as minors experience higher fertility later in life and have lower educational attainment Some estimates also suggest non-zero effects on labor market outcomes The results indicate that Parental Involvement laws may have permanent effects on women's outcomes

Finally, chapter four summarizes the main contributions of this dissertation, discusses its limitations and some venues for future research

xin

1.1 Background

In recent decades, significant global changes have occurred in both developed and developing

countries towards legalization and regulation of abortion This issue has received considerable attention, and its legality and availability have often generated controversy In the Unites States, the movements towards legalization began in the mid-1960s, and legal abortion was suddenly extended to the entire

country in 1973 with the landmark ruling of the U.S Supreme Court in Roe v Wade Since then, abortion

policy has been one of the most contentious issues in the U.S domestic political agenda In fact, over the past four decades, states have enacted laws and administrative rulings mostly aimed at regulating and limiting whether, when and under what circumstances a woman may terminate her pregnancy, and also at directly regulating the availability of abortion services

While the public debate about abortion is usually focused on ideological extremes, the contribution of economics is potentially important because it is focused on measuring consequences, which is central to the practical argument surrounding abortion laws and regulations But why is abortion

an economic issue? From an economic point of view, abortion is an individual choice, which can be affected by constraints (including economic constraints) These constraints can be altered by policies which, in turn, affect individual choices Economic analysis can reveal the importance of these policies and of economic constraints, and the evidence gathered can be used to assess the consequences and to design policies targeted at abortion

The debate about abortion has fueled multiple lines of investigation in economic research: from the analysis of various types of restrictions and determinants of abortion, to the study of its effect on

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behavioral responses to changes in the abortion environment

1

In particular, I consider the impact of changes in the availability of abortion services and of changes in restrictions to minors' access to abortion I concentrate on these two topics because they represent important aspects in the overall decision-making process about appropriate abortion policies In fact, over the past decades, the availability of abortion services has been facing increasing regulation and states have been keeping introducing or amending their original parental involvement statutes to include new requirements Furthermore, these topics have not been addressed (or not satisfactorily) by previous research More generally, there is an inadequate base of evidence to understand the substantial changes in abortion that have occurred over time and the consequences of policies targeted at abortion Therefore, this dissertation contributes to complement and extend previous work in several ways, with the aim of providing a better understanding of the behavioral consequences that abortion policies generate

In order to place the results of subsequent analysis into context, it is important to understand the institutional background and details of a public policy issue as intricate as abortion Therefore, the next section provides a brief description of the judicial decisions and legislative environment related to abortion I then describe in more detail the purpose of this study and its contributions

1.1.1 Review of Abortion Legislation

In the United States, at the time the Constitution was adopted, abortion before "quickening" (before the fetus first movements could be felt) was legally performed under common law Starting with New York in 1828, states started to impose abortion restrictions and by the end of the century it became

an illegal procedure allowed only to preserve a woman's life The prohibition of legal abortion during most of the 19th century came under the same anti-obscenity or Comstock laws (1873) that prohibited the interstate mailing, shipping, or importation of materials of "obscenities," which included the dissemination of birth control information and services These state laws survived virtually unaltered until the 1960s, and before then only the District of Columbia in 1901 and Alabama in 1951 had legalized

1 The language of these statutes varied greatly across states Some statutes referred to advertising or information bans; others included explicit sale bans and/or prohibited the prescription of birth control or other contraceptives

abortions to preserve the health of the woman (judicial opinions in Massachusetts State courts also recognized a health exception)

In 1962, the American Law Institute promulgated the new Model Penal Code (MPC) which liberalized abortion under limited circumstances including rape, incest, statutory rape and severe physical-

mental defects of fetus or mother In 1965, the Supreme Court decision in Griswoldv Connecticut (381

U.S 471, 1965)2 identified a right to privacy that protected married couples' rights to contraceptives In the aftermath of this ruling, state legislatures actively revised their obscenity statutes to permit sales of contraceptives to married women In subsequent rulings, the right to privacy was held to apply to

unmarried individuals in Eisenstadt v Baird (405 U.S 438, 1972)

In the following years, on the heels of Griswold, pro-abortion activists argued that women's

access to abortion was similarly protected, and they began campaigns to change the laws In 1966, Mississippi legalized abortion in case of rape and in the late 1960s few states began to allow abortions under the MPC provisions The first were Colorado, North Carolina and California in 1967, followed by Maryland in 1968, Arkansas, Delaware, New Mexico, Georgia and Oregon in 1969, and South Carolina, Kansas and Virginia in 1970 Abortion became more broadly available in five states in 1970: New York, Washington, Alaska and Hawaii repealed their abortion laws while the California Supreme Court (ruling

in late 1969) held that the state's law outlawing abortion was unconstitutional The legalization of abortion in these five states then led to several successful legal challenges of state abortion laws in federal courts (Merz et al 1995, 1996)

In 1973, the U.S Supreme Court decisions with its ruling in Roe v Wade (410 U.S 113, 1973) and Doe v Bolton (410 U.S 179, 1973) overturned the abortion laws of Texas and Georgia, respectively,

and led to nationwide abortion legalization.3 The Roe case arose out of a Texas law that prohibited legal

2 In Griswold v Connecticut the Court held that a Connecticut law which uniquely prohibited the use of

contraceptives to married couples was unconstitutional because it violated the individual's rights to marital privacy

J Jane Roe, a 21-year-old pregnant woman was the plaintiff Henry Wade was the Texas Attorney General In Doe, the plaintiff was a woman who was given the pseudonym "Mary Doe" and sued Arthur Bolton, the Attorney General

of Georgia

abortion except to save a woman's life The Georgia law in question permitted abortion only in cases of rape, severe fetal deformity, or the possibility of severe or fatal injury to the mother according to the MPC provision adopted in 1969 Furthermore, the law imposed restrictions on where the abortion could be performed, that only Georgia residents could get an abortion and it required the approval of a three doctors-hospital committee

The Roe Supreme Court ruling was based on the principle that the right to privacy included the right of a woman to decide whether to have children or abort a pregnancy without state interference Roe

required a balancing of state's and individuals' rights with respect to abortion and used a trimester benchmark to define viability The Court established that a woman could get a legal abortion from medical professionals for any reason during the first trimester States could regulate, but not prohibit, abortions in the second trimester After the second trimester, when the fetus is viable, a state could restrict

or prohibit abortions except when the mother's life has to be protected Doe was meant to be read in conjunction with its more famous Roe counterpart In Doe, the Court ruled that a woman's right to an

abortion could not be restricted by the state if abortion was performed for reasons of maternal health The Court defined health as "all factors - physical, emotional, psychological, familial, and the woman's age -relevant to the well-being of the patient." Furthermore, the Court struck down all other provisions of the Georgia law

The two Supreme Court's decisions in Roe and Doe left states some room for discretionary state

policies and many went ahead enacting their own abortion regulations In fact, in the aftermath of legalization, several states tried to impose their own restrictions on abortion that made more difficult for women to exercise their rights In 1976, the Congress adopted the first Hyde Amendment banning the use

of federal Medicaid funds to provide abortions, so that states could rely only on their own funds to pay for abortions of low income women Named after the Republican Congressman Henry Hyde of Illinois, the first version of the Hyde Amendment prohibited the use of federal funds for abortion services (except when the woman's life was threatened) under all programs administered by the Department of Health and Human Services, affecting primarily Medicaid In 1977, a revised Hyde Amendment was passed allowing

states to deny Medicaid funding except in cases of rape, incest or life endangerment (abortions that meet these federal exceptions have to be covered) The Hyde amendment was immediately contested in the

Courts, but in June 1980 the U.S Supreme Court in Harris v McRae (448 U.S 297, 1980) and Williams

v Zbaraz (448 U.S 358, 1980) ruled that the federal and state governments have no obligation to provide

funds for the exercise of the right to abortion Today, thirty-two states prohibit the use of state funds (but have to meet the federal exceptions) The remaining use their own funds to pay for all or most medically needed abortions, although most do so as a result of a court order under their individual states constitutions (Merz et al, 1995, 1996; Alan Guttmacher Institute, 2011) In defiance of federal requirements, South Dakota limits funding to cases of life endangerment only

Since Roe, numerous states have also enacted parental notification or consent laws requiring that

minors notify parents or obtain their consent before an abortion can be performed These laws are known

as Parental Involvement laws (PI laws) Courts have generally upheld laws that incorporate a judicial bypass mechanism, which allows a minor to petition a court for permission to have an abortion without involving parents Much litigation arose challenging these laws and most of them remained unenforced in the middle and late 1970s/early 1980s Today, thirty-five states require parental involvement in minors' abortions (legislation on Parental Involvement laws is reviewed in detail in Chapter three)

In 1992, the Supreme Court's ruling in Planned Parenthood v Casey (505 U.S 833, 1992) retained the essential holding of Roe that women have a right to terminate their pregnancy before fetal

viability, but allowed states to restrict abortion access so long as these restrictions do not impose an

"undue burden" on women seeking to terminate their pregnancy The Court's decision upholds Parental Involvement laws, as well provisions requiring information to be offered to women about abortion procedures and alternatives to abortion, and mandating a waiting period before the procedure can be performed In 1992, Mississippi became the first state to enforce such a policy Currently, twenty-four states require a woman seeking an abortion to wait a specified period of time, usually twenty-four hours, between when she receives counseling and the procedure is performed Six of these states have laws that require the woman make two separate trips to the clinic to obtain the procedure

The Casey's decision represented an important change for evaluating the constitutionality of

abortion regulations and leads the way for further enactment of PI laws as well as other regulations Furthermore, over time states imposed a series of regulations on abortion facilities governing a range of operational aspects that are not typically imposed on other types of medical providers (Medoff, 2009) Some states also restrict private insurance coverage of abortion More often, states have banned abortion coverage in public employees' insurance policies or in other cases where public funds are used to insure employees

This description suggests that the current environment of abortion availability in the United States has been shaped by a long series of judicial and legislatives interventions that took place in the past decades Knowledge of these aspects will help in interpreting and put into context the results of the analysis of subsequent chapters The next section describes the purpose of the study and the contributions

of this research, which are separately analyzed in chapters two and three, respectively Chapter four summarizes the contributions and discusses

1.2 Purpose of the Study and Contributions

As described in the previous section, after Roe v Wade the main source of changes in abortion

policy have been attempts at the state levels to impose restrictions on abortion access The court ruling itself, while legalizing abortion, left states some discretion to regulate the procedure Furthermore, the Court's decision did not mandate the provision of abortion services but allowed access to providers to vary within and across states.5

The available data suggest that the number of abortions increased dramatically following legalization (although there is little direct evidence on the number of illegal abortions performed in the 1960s) According to the Alan Guttmacher Institute (AGI) the number of legal abortions (and abortion

4 Today five states have laws in effect restricting insurance coverage of abortion in all private insurance plans written in the state Twelve states restrict abortion coverage in insurance plans for public employees and other states have more than one of the above restrictions

5 The term abortion provider refers to any facility performing legal abortion services

rates) rose sharply in the wake of Roe, from under 750,000 in 1973 to over 1.6 million in 1980 and then

started to decline, reaching about 1.2 million in 2005 (correspondingly, abortion rates rose from 16 abortions per thousands women in 1973 to about 29 in early 1980s and back to 19 in 2005) Previous research has not been able to provide satisfying explanations for these patterns and in some cases has been focused only on the role of government policies like Medicaid abortion funding restrictions or PI laws Notably, relatively little attention has been given to explanations focused on the supply side, despite the data showing patterns in abortion rates and abortion providers being strongly interrelated, as depicted

Source: Author's elaboration from Henshaw and Kost (2008)

Figure 1 National abortion rate 1973-2005

Source: Author's elaboration from AGI provider data

Figure 2 Number of abortion providers 1973-2005

From a policy point of view, it is important to know whether and to what extent abortion rates are sensitive to changes in the legal availability of abortion services This is relevant because the

constitutional right of a woman to terminate her pregnancy as established in Roe may be undermined if

constraints in access to abortion, which are not related to demand factors, impose an undue burden on the choice to terminate the pregnancy In this context, the number and geographic distribution of providers may be an important determinant of access

The manner in which abortion availability affects women's behavior is important as the analysis

of this issue allows answering several questions Does the change in availability of abortion services alter the frequency of abortions? Does it affect also women's sexual and contraceptive behavior? Does it imply

a differential impact across different groups of women? These issues can be examined in the framework

of economic analysis of fertility The decision of terminating a pregnancy depends on the net benefit from

another child and abortion can be considered as a means of ex-post fertility control In this context, abortion decisions are function of cultural and religious values as well of all factors that affect the full cost of having children and the full cost of obtaining an abortion Reduced geographical access to abortion providers has a direct effect on the full cost of services by increasing the distance women have to travel to get an abortion Lack of local services makes it harder for women to obtain information about facilities Costs increase because of travel expenses; post-abortion complications are more difficult and costly to be treated; and women have to be away from work and home for a longer period

While some previous studies did attempt to assess the direct impact of variations in the local availability of abortion services on abortion demand, they have been limited in their ability of providing estimates of a causal relationship Thus, the research question I want to answer in the first part of this study (chapter two) is whether changes in the supply of abortion services affect abortion rates and thereby uncover whether there is a causal connection between the seemingly interrelated patterns in abortion rates and abortion providers observed in the data In doing this, this chapter complements and extends previous research in several ways

First, 1 use a panel of U.S counties and a fixed effects model design to obtain more robust estimates of the impact of changes in availability of abortion services on abortion rates The use of variation in availability of abortion services within counties over time allows me to more plausibly limit the influence of potentially confounding factors which greatly vary across geographic areas and may confound the estimates of the impact of abortion availability (like social and community norms toward sexual activity or attitudes toward abortion) 1 use counties as geographical reference unit of analysis because they define a more proximate market for abortion services compared to states or metropolitan areas employed in most of previous research To the best of my knowledge, this is the first study to use a large panel of U.S counties to analyze the issue of abortion availability

In addition, the majority of previous research neglects the problem that demand and supply of abortion services are simultaneously determined To address this limitation, I implement an instrumental variable approach to control for the fact that measures of provider availability are potentially endogenous

Finally, overall population abortion rates mask large differences across demographic groups Thus, I also stratify the analysis according to women's demographic characteristics which, according to economic theory, may signal different behavioral responses to changes in availability of services

The results of the analysis carried out in chapter two shows that reduced availability of abortion providers is associated with a decline in abortion rates over the sample period considered and results are robust across a wide range of specifications I provide evidence that the instrumental variables procedure

is valid and that estimates of the correlation between abortion rates and access to abortion services can be plausibly interpreted as causal As described at the beginning of this section, the data document a substantial decline in both abortion rates and the availability of providers after the early 1980s My results, which consistently indicate that decreased access to services leads to lower abortion rates, confirm the broader direction of these trends

These findings are important from a public policy point of view They indicate that provider availability directly affects women's behavior as policies either expressly or indirectly limiting access to abortion decrease women's use of the procedure While, over the years, the U.S Supreme Court has generally struck down regulations that place an "undue burden" on women on their path to terminate a pregnancy, it has usually applied this standard to specific restrictions The findings of independent effect

of abortion availability in its broader dimension suggest that these standards should probably take into account a broader range of restrictions and factors affecting abortion services and use across women

In the second part of the dissertation (chapter three) I analyze the long term effects of abortion Parental Involvement laws (PI laws) for minors According to these laws, minors are required to either notify a parent(s) or obtain their consent before terminating their pregnancy After several years of battles

in lower court rulings, the United States Supreme Court has held that parental involvement does not infnn°e on a minor's constitutional rights to terminate a pregnancy if judicial bypass options are available To gain a judicial bypass, a pregnant minor must demonstrate either that she is mature enough

to decide to have an abortion or that the procedure would be in her best interest Today, the majority of states enforce some form of parental involvement (notification, consent, or both) requirement (Figure 3)

H State with PI law in effect D State without PI law in effect

Source: Author's elaboration from AGI (2011)

Figure 3 States with Parental Involvement laws in effect as of February 2011

These laws have generated great controversy in the past decades in both court rulings and public opinion Supporters argue that excluding parents from minors' abortion decisions violate parental rights; that the laws aid the decision making of immature minors and contribute to resolve family conflicts and may generate significant increases in sexual abstinence and contraceptive use, thereby reducing pregnancy rates Opponents argue that parental involvement imposes an extra cost on minors and emphasize that the reality of the judicial proceedings represents a biased legal avenue for minors to get an abortion The Supreme Court itself acknowledges the difficulty in measuring "maturity," but has continued to use this as the standard for judges to evaluate minors' petitions Furthermore, albeit the Supreme Court has mandated expediency in judicial bypass, some courts are not prepared or willing to hear bypass cases thereby causing delays In addition, although approximately one third of states do not

have PI laws in effects, their geographic location de facto limit interstate travel as an option to minors

seeking an abortion In sum, according to this view, the laws would impose a significant burden on minors willing to terminate their pregnancy

Previous economic research on PI laws has focused on their current impact on minors' abortions, and to a less extent, births Parental involvement imposes a cost on teen women willing to abort in states

in which such laws are binding Given a downward sloping demand curve for abortion, the short run effect would be a reduction in the number of pregnancy terminations The, the key issue, from a policy point of view, is whether the laws have an effect on births On these points, the evidence provided by previous research is not robust across papers, in part because of flaws in the research designs adopted and limitations of the data (see chapter three for a throughout discussion of this issue)

In particular, the overall reading of this literature suggests that there may be substantial heterogeneity in the behavioral responses to the PI laws: heterogeneity along a geographic dimension (i.e where minors' live and to the legal environment prevailing in surrounding states) or demographic dimension (for example according to race and/or actual age of conception) which the majority of previous research has not been able to take into account because of the lack of detailed abortion data This might also explain a lack of consistent findings across studies and suggest that looking only at the short run impact of PI laws may give a biased and partial understanding of the overall impact of these statutes This motivates me to look at this issue from a different perspective In fact, the effect of parental laws may go beyond current outcomes and affects women later in life Looking at women outcomes from this point of view and using a different research design might help to evaluate whether parental laws have an overall effect on women behavior

When a state enacts a parental consent/notification law, a minor that would have otherwise aborted an unwanted pregnancy may instead give birth Minors who have birth instead of aborting have still many fertile years ahead and they may not necessarily end up with more children throughout their lifetime (for example, their behavior over the remaining fertile years may be such that this additional birth

is compensated by lower subsequent births) However, while it is not clear whether there are long run effects, there are reasons to expect this to be the case The timing of first birth (a teen birth) may affect subsequent education choices, marriage, and other factors that influence fertility This suggests that the short-run impact of the law does not necessarily predict changes in adult fertility In this framework, the

case of PI laws is particularly interesting because they affect a specific and well defined group of women during a period of time (late teen years) which is critical for subsequent education choices, marriage and fertility

The purpose of this project is to estimate the impact of PI laws on adult outcomes, thereby contributing to the existing literature which is instead focused only on short-run effects The research design exploits the fact that states enacted PI laws at different times to identify cohorts that have been more or less exposed to abortion restrictions while minors The findings of this chapter suggest that the legal abortion environment faced by women as minors may have lasting effects, especially for black females In particular, the results show that females who grew up in an environment that prohibited them

to obtain an abortion without PI laws are more likely to have more children as young adults and invest less in their education Overall, the results of this study suggest that at least some groups of women may

be affected by minors' abortion restrictions well beyond adolescence This is an important aspect for policymakers to consider for the design of appropriate abortion policies directed to minors

2.1 Introduction

The incidence of abortion in the United States increased steadily after federal legislation that legalized abortion in 1973 and peaked in 1982 Thereafter, the incidence of abortion declined reaching levels not seen since the early 1970s To explain this pattern, a large literature has investigated the effect

of government policies that continued to change after legalization such as parental notification laws, Medicaid financing of abortion and mandatory waiting periods In contrast, relatively little attention has been given to explanations focused on supply side factors

One potential explanation of the changes in abortion is changes in the number of abortion providers State regulations, violence against providers, and the public's stigmatization of providers likely affected the number of providers over time and their geographical distribution Markets for abortions developed quickly soon after legalization, but the number of providers started to decline after 1982, which

is a period of increasing state regulations of abortions and increasing harassment of providers In particular, post abortion legalization, the number of hospital abortion providers declined, but the number

of non-hospital providers increased sharply until the early 1980s, then remained relatively stable until mid 1990s, and then declined Also, the geographic distribution of abortion services has become increasingly unequal and over time providers tended to concentrate in urban areas Thus, over the past three decades the supply of abortion providers in the Unites States has decreased and become much more concentrated,

as measured by size of provider and geographic distribution

Access to abortion services is important from a policy point of view because the constitutional right to terminate a pregnancy is undermined if the lack or limited availability of services that is not related to demand factors imnoses a siCTnificant burden on the choice to abort For exainnie lack of local services may make it harder for women to obtain information about facilities Similarly, unequal geographic distribution of providers increases the cost of abortion because of greater travel expenses and

14

the greater time costs as women have to be away from work and/or home for a longer period Further, post-abortion complications are more difficult and costly to be treated when providers are distant Finally, significantly longer distances may delay abortion until a later point in gestation when the physical and monetary costs of the procedure are higher (Henshaw 1984; Henshaw, 1995; Henshaw and Finer, 2003).6

In addition, in a model in which abortion acts as an insurance policy against the risk of an unwanted pregnancy (Kane an Staiger, 1996; Levine and Staiger, 2002), reduced access increases the cost

of insurance and may affect not only women's ex-post choice of using the service, but also their ex-ante

sexual and contraceptive behavior Women may substitute greater contraception for the now more costly abortion services Thus, whichever the mechanism through which abortion access affects abortion demand, reduced availability of providers such as that observed in the U.S would be associated with lower consumption of abortion services, which has also been observed

Previous studies generally confirm this prediction (Blanck et al 1996; Matthews et al 1997; Brown and Jewell, 1996; 2001, among others) However, these studies have been limited in their ability

to provide evidence of a causal relationship The primary problem is that the observed decline in both abortions and the number of abortion providers is consistent with a decrease in supply, for example due to regulatory constraints, or a decrease in demand Observing the equilibrium cannot identify which explanation is correct For example, abortion rates and availability of abortion providers both tend to be higher in urban and more densely populated areas However, this could be due to a greater demand for abortions instead of a greater supply of abortion services

Another problem is that most previous studies have used the state as the unit of analysis However, counties are arguably preferable to states; counties represent a more appropriate market area for abortions services and are more homogeneous with respect to socioeconomic characteristics and medical resources than states or metropolitan areas In fact, within most states there is great variation in

6 In 2001, the average monetary charge for abortions was 468$ (price at nonhospital facilities at 10 weeks of gestation) The lowest average charge ($364) is reported by specialized abortion clinics, and the highest average charge ($632) is reported by physicians' offices The mean price rises up to 774$ (1,179$) at 16 (20) weeks, respectively Charges are approximately twice as high in facilities that perform fewer than 30 abortions per year as

in those that perform 400 or more The inflation-adjusted cost of abortion has remained constant over the years

availability of abortion providers over time and space Finally, past studies have used simple counts of providers in a given geographic area Counts may capture problems related to capacity constraints However, during the 1980s and 1990s there has been a progressive urban concentration of providers with the result that many areas lack abortion services At the same time, women in counties without providers may have access to a facility in a neighboring county Thus, simple counts may not adequately reflect physical proximity and in this case distance to a provider is a more proximate measure of availability (Matthews etal., 1997)

In this chapter I make several contributions to this literature First, I address the endogeneity of the number of abortion providers (supply) by means of an instrumental variable approach that uses changes in college enrollment to predict changes in availability of abortion services Young unmarried women have relatively high rates of abortion, and providers are likely to locate near concentrations of such persons Thus living closer to an area with a large concentration of young women (college enrollees) will increase the availability of abortion services for all women, but the increased supply is not due to the demand for services of all women, but only young, college enrollees Second, I analyze the relationship between abortion rates and different measures of availability of abortion services using a panel of U.S counties and a fixed effects approach that allows me to obtain more robust estimates of the impact of changes in providers' availability on abortion demand To the best of my knowledge, this is the first study to use a large number of U.S counties Furthermore, as aggregate effects may mask important differences in behavioral responses across women, I analyze the impact of changes in abortion services on different groups of women distinguished on the basis of demographic characteristics which can signal different behavioral responses This aspect has not been investigated in previous research and is potentially important from a policy point of view since it allows me to identify groups that are at a greater risk of being affected by reduced availability of abortion providers

The results show that reduced availability of abortion services is associated with a decline in abortion rates over the sample period and estimates are robust across a wide range of specifications I find also some evidence that the effect varies across demographic groups, being strongest among whites and

unmarried women Most importantly, I provide evidence that the instrumental variables procedure is valid, and thus, estimates of the correlation between abortion rates and reduced access to abortion services can be plausibly interpreted as causal

2.2 Abortion Legislation and Structure of the Abortion Market

As described in chapter one, abortion was legalized nationally in 1973 by the U.S Supreme Court

with its ruling in Roe v Wade However, in the aftermath of Roe, several states tried to impose restrictions

on abortion that made it more difficult for women to exercise their rights

Over the years, states have also implemented restrictions which directly affect providers These regulations vary across states and include physician training and licensing requirements Many states prohibit certain qualified health-care professionals from providing abortion services requiring that only a licensed physician may perform an abortion and an annual fee must be paid to obtain the license.7 Other regulations involve size of physical-plant, administrative processes (e.g., recordkeeping), and personnel and patient-care requirements: procedure rooms must be of a certain size, separate counseling rooms have

to be available, and expensive ultra-sounds machines have to be in place Many states also establish that

in order to perform abortions of specific gestation, providers have to be licensed as ambulatory surgical centers Some laws require providers to be located within a certain distance of a hospital All these requirements impose restrictions not applied to other medical professionals that may significantly affect the costs and therefore supply of abortions services

Only a few studies have investigated the effect of the regulatory environment on the supply of abortion services Medoff (2009) examined whether restrictive abortion laws have an impact on the number of providers in a state over the 1982-2005 period He found that Medicaid funding restrictions, PI

Other states restrict the provision of abortion only to physicians licensed to practice medicine in the state or restrict practice to board certified OB/GYN

laws and targeted regulation of abortion providers (TRAP) significantly reduced the number of providers

in the state (see also Haas-Wilson, 1993, for similar early studies)

Beauchamp (2010) investigated the role of state regulations in explaining the change of abortion services over time using a dynamic model of competition among different types of abortion providers which offer differentiated services and compete Supply-side state regulations are assumed to alter firms' variable costs but also fixed operating and entry costs Fixed operating costs affect incumbents' production and exit decisions, while fixed entry costs affect the decisions of potential entrants The author found that fixed costs are especially important in explaining concentration of abortion provision in large clinics and the exit from the market of smaller clinics and hospitals Simulations show that the removal of all abortion providers' regulations between 1991 and 2005 translates in an increased entry and competition among providers Overall the results suggest that 10 percent of the observed decline in the number of abortions over the sample period can be attributed to changes in supply side regulations

Regulations are not the only element to potentially contribute to large fixed costs While antiabortion demonstrations occurred since legalization, violence against abortion providers started to intensify in the 1980s As opposed to the violence of the 1970s, which was mainly committed by individuals acting alone, the increased acts of violence in the 1980s were mostly the results of anti-abortion groups that started to get formally organized during that decade (Jacobson and Royer, 2010, for a detailed review) Violence includes vandalism, threats, arson, bombings and also murders in the most extreme cases Violence may increase expenditures for security and legal services, insurance, new licensing requirements and problems hiring staff because of increased fear of working at abortion clinics, and it might even lead to a reduction or displacements of clinics following the attacks The fact that abortion services are subject to strong opposition may lead certain firms, especially hospitals and non-

8 Albeit most of the restrictions could be considered as demand side policies, they may have also an impact on the ability of providers to offer the service Extra-costs may include the hiring of more staff personnel, more physician consultation time, higher mailing/telephone expenses, and record-keeping requirements

9 In particular, different provider types offer services at different gestational limits and prices The author models differentiation as being across type of provider: hospital, small provider and large specialized provider

specialized clinics that provide other services, to leave the market to avoid the negative effects these activities have on the demand of other services Medoff (2009) found that antiabortion harassment, measured as the percentage of abortion providers who reported picketing of their facility or blocking of their patients, significantly reduced the number of abortion providers within the state over the 1982-2005 period A recent study by Jacobson and Royer (2010) found that abortion violence significantly reduced abortion incidence and the availability of providers in targeted counties The authors also found that this reduction is in part compensated by an increase in the number providers and abortion rates in counties within 50 miles suggesting that displacement of both demand and supply of services takes place following the violence

Overall, the abortion market appears to be characterized by extensive state regulation and violence which affect the provision of abortion services and in a variety of ways (e.g., raise fixed costs) These aspects differentiate this market from the market of other medical services and help also to explain the geographical and temporal distribution of abortion providers, which is particularly important in determining access to abortion In fact, an unequal geographic distribution of services may significantly increase both the search costs and the time and out of pocket costs to terminate a pregnancy In this framework, the presence of large fixed costs can explain the concentration of most abortion facilities in areas with large population density and with greater demand in general: where the market size is large providers can achieve lower average costs spreading fixed costs across more services In other words, deficient demand would prevent a provider from expanding to realize all economies of scale Furthermore, social stigma surrounding abortion may induce many women who seek to terminate their pregnancy to do so anonymously and a woman's privacy is more likely to be jeopardized in small communities All these aspects suggest that the structure of the abortion market itself tends to favor the clustering of providers where the demand is strongest

Figures 4 and 5 describe the relationship between the probability of having a provider in county and county population/population density suggesting the size of the market is an important determinant of providers' location decisions 1 use this fact later to refine the instrumental variables research design;

be on how changes in providers affect women living in less populated counties

Figure 5 Probability of provider in county and county population density

2.3 Previous Research on Provider Availability

The first attempt to assess the impact of changes in the availability of abortion providers on abortion demand dates back to Deyak and Smith (1976) The authors analyzed out-of-state abortion demand in New York State focusing on the role of transportation costs Before 1973, women had to travel

to New York State to get a legal abortion By making abortion services more broadly available throughout

the country, the national liberalization of abortion introduced by Roe reduced the distance women had to

travel to get abortions Using a travel cost demand model, the authors estimated large benefits (in the form of consumer surplus) accruing to women seeking abortions Shelton et al (1976) use abortions by county of residence for a cross section of Georgia counties to estimate the impact of travel distance on abortion utilization Their data showed that the farther a woman has to travel to get an abortion the less

likely is to obtain one Furthermore, the opening of two small clinics outside Atlanta resulted in the same increase in abortion in the surrounding rural counties as in the urban counties where the clinics operated

Gohmann and Ohsfeldt (1993) employed a fixed-effects model to estimate the demand for abortion using U.S state level data for 48 states and for the years 1982, 1984, 1885 and 1987 To describe the impact of within-state travel costs, they included an index capturing the limited geographic availability of abortion services The index was a function of the percent of women living in Metropolitan Statistical Areas (MSA) within the state and the percent of the state's abortion providers located within MSA As alternative measures of geographic availability, they included the proportion of women aged 15-44 living in counties without an abortion provider, and finally a measure of provider availability that is function of the number of state abortion providers per 1000 women aged 15-44 The results indicated that the access measures had no statistically significant effect on state-level abortion rates As noted by the authors, this might have been due to the little within-state variability of the indexes over the four years of the analysis, or it could have indicated that the indexes used were a poor measure of geographic access Coefficients estimates had the "wrong" size and were difficult to analyze, and in any case standard errors were too big to detect any reasonable sized effect

Brown and Jewell (1996), Brown et al (2001), and Aspin et al (2000) estimated the responsiveness of abortion demand to travel cost variations using county level data for the state of Texas, averaged over 1992 and 1993 As measure of provider availability they used the travel cost and travel distance to the nearest abortion provider The results showed that higher travel costs and larger distances were associated with significantly lower county-level abortion rates However, as noted by the authors, by using cross-counties variation it is difficult to evaluate the causal effect of access measures on abortion rates In fact, there may be differences in cultural or political climate that affect at the same time both to abortion restrictions and abortion rates For example, greater geographic availability of abortion services

in a given area may simply reflect favorable attitudes toward abortion which, in turn, may independently

affect abortion rates That is why fixed effects models, by using the unit of observation as its own control

across time, allow to better control for unmeasured confounding factors and to estimate the effect of abortions access restrictions on abortion rates

Following this line of research, Blank et al (1996) used U.S state-level data on abortion rates from 1974 to 1988, abortion funding restrictions, parental involvement laws and number of providers in the state to estimates the effect of various types of restrictions on state abortion demand of women aged

15 to 44 They found that a larger number of abortion providers in a state were significantly associated with higher abortion rates In a similar study, Matthews et al (1997) examined the effect of provider availability on U.S state abortion rates, over the period 1978-1988 They used different measures of abortion services accessibility: number of abortion providers per 1,000 women, proportion of women living in counties with providers and average distance to the nearest provider All these measures were shown to be significantly associated with abortion rates in the expected direction

Kane and Staiger (1996) developed a model in which pregnancy is endogenous to estimate the effect of restriction on abortion access on teen birth rates They used county level panel data from U.S counties to show that abortion access, as proxied by distance to the nearest abortion provider and state abortion laws, reduced teen birth rates They interpreted this result according to a model in which higher abortion costs induce teens to be more cautious in terms of sexual activity and contraceptive use

Joyce and Kaestner (1996) used a Difference-in-Differences-in-Differences estimator on individual level data on births and abortions from NCHS in three southern states from 1986 to 1991, to identify the impact of parental laws on the likelihood that a minor's pregnancy will be terminated In their analysis, they also included a measure of the actual travel distance from a woman's county of residence to the nearest county with an abortion provider They found that the travel distance to a county with an abortion provider has a relatively weak effect on pregnancy resolution among minors More recently, Gius (2007) analyzed factors that affect individual abortion decisions using individual level data from the National Longitudinal Survey, and state-level data on abortion providers and legal restrictions He found that the greater the number of per-capita abortion providers in the state the greater the likelihood that a woman would have an abortion However, the use of individual level data to measure abortions is

particularly problematic Because of small sample sizes, individual level studies cannot control for unobserved state-effects or state-specific linear trends and estimates are more likely to suffer of omitted variables bias

Most of the studies just reviewed found that provider availability affects abortion demand However the magnitude of the impact crucially depends on weather one credibly controls for potentially confounding factors and weather abortion availability is measured at the state or county level data As described in the introduction, most papers used state level data to measure abortion access However, as geographical reference units, counties are arguably preferable to states Counties represent a better defined market for abortions services and are more homogeneous with respect to socioeconomic characteristics and medical resources than states or metropolitan areas Furthermore, even within the same state there is great variation in availability of abortion providers over time and space This aspect would not be properly captured by aggregate state-level measures of provider availability and would tend to bias estimates toward zero (attenuation bias) Also, different access measures capture different aspects of availability One of the most widely used measures is the count of providers in a given geographic area

Counts may capture problems related to capacity constraints However, during the 1980s and 1990s, there has been a progressive concentration of providers with the result that many areas lack abortion services At the same time, women in counties without providers may have access to a facility in

a neighboring county Thus, simple counts may not adequately reflect physical proximity and in this case distance to a provider is a more proximate measure of availability (Matthews et al 1997; Joyce and Kaestner, 1996)

In this chapter I analyze the relationship between abortion rates and availability of abortion services at the county level using a sample of U.S states and employing different measures of provider availability To the best of my knowledge, only few studies employ county level data Brown, and Jewel! (1996), Brown et al (2001), Aspin et al (2000) limit the analysis to Texas counties, Shelton et al (1976) focus Georgia counties, and Kane and Staiger (1996) analyze the impact of abortion access on birth rates but not abortion rates

As discussed above, another empirical concern 1 face in the analysis of abortion demand is simultaneity, a possible source of endogeneity in our abortion access measure Only Blanck et al (1996) explicitly recognize this problem and attempt to solve it using an instrumental variable approach In particular, they instrument the number of abortion providers in the state with the total number of non-Ob/Gyn physicians and the total number of hospitals in each state and year Following a similar approach Brown et al (2001) use the number of prenatal clinics per 1000 women age 20 to 44 and the number of doctors per 1000 residents as instruments for travel distance To be plausible instruments these variable should be strictly correlated with the abortion access and affect abortion rates only though the access measure However, also doctors and prenatal clinics may sort themselves across geographic areas based

on the same unobserved factors that may affect abortions rates and abortion providers' location decisions

In sum, these instrumentation attempts result unconvincing as these measures may be not plausibly exogenous and they may be also weak instruments too, an issue not fully assessed in these papers

2.4 Conceptual Framework

In standard economic models of fertility (see, for example, Becker, 1981) women have perfect information about costs and benefits of children before pregnancy and can also perfectly control their fertility at no cost Unintended pregnancies can never occur and there is no role for abortion

However, fertility control is both costly and imperfect Although contraception reduces the likelihood of becoming pregnant, there is still a certain degree of uncertainty about whether a pregnancy will actually occur Moreover, women do not need to be perfectly informed at the time of pregnancy, as subsequent information may help them to decide whether the birth is wanted or not These considerations suggest that the woman's decision making process is a sequence of choices under uncertainty: uncertainty

of contraception and chance of pregnancy and uncertainty of wanting birth conditional on pregnancy

In this framework, the key role of abortion is to provide insurance for this uncertainty (Kane and Staiger, 1996; Levine and Staiger, 2002; Levine, 2006) Like other forms of insurance, abortion

availability may affect abortion decisions on two margins Ex-post, there will be a decrease in abortion

conditional on pregnancy; a decrease (increase) in availability of abortion services reduces (increases) the probability of abortion given pregnancy and correspondingly increases (reduces) the probability of birth given pregnancy In other words, abortion availability allows a substitution of abortions for births if the pregnancy turns out to be unwanted But there may be an additional effect as well Higher (lower) abortion costs may increase (decrease) the demand for self-protection; the availability of abortion-

insurance-creates ex-ante moral hazard This suggests that women may change their sexual and/or

contraceptive behavior in response to changes in abortion costs thereby affecting their likelihood of becoming pregnant

This framework also provides an insight about differences in behavioral responses to changes in

abortion costs across women The intuition is that ex- post and ex-ante moral hazard, and thus the impact

of an increase in abortion costs, will have different effects depending on the probability that the birth is wanted and thus depending on demographic characteristics that are associated with this probability

Following Levine and Staiger (2002), a woman is assumed to make her decisions sequentially She initially chooses a given level of contraceptive effort which determines the probability of becoming pregnant If she gets pregnant, she receives additional information about the payoff of a birth and the pregnancy may reveal wanted or unwanted.10 A wanted pregnancy gives a positive payoff An unwanted pregnancy entails costs regardless of whether she aborts or gives birth Women do not know ex-ante whether a pregnancy will be wanted-unwanted, but are assumed to be able to assess the probabilities of these uncertain outcomes, which are incorporated in their individual decision-making process They then choose the optimal level of contraceptive effort so that its marginal cost is equal the marginal benefit of avoiding a (potentially unwanted) pregnancy In this model, women differ in the probability that the pregnancy reveals unwanted and this allows distinguishing different behavioral responses to changes in abortion costs

The term 'wanted' refers to any birth that would impose a (overall net) benefit, and not a cost For example, information about support from parents, partner, and health problems of mother/fetus may become available only after pregnancy and help the woman to determine the wantedness of pregnancy