Francis Place and the Promotion of Vice

Who was Francis Place? It was Francis Place, not Thomas Malthus, who first advocated the use of contraception to control population growth. He did so in the midst of arbitrating the debate between Malthus and Godwin, published in his Illustrations and Proofs of the Principle of Population (1822). Malthus always maintained that contraception was a vice,

“Promiscuous intercourse, unnatural passions, violations of the marriage bed, and improper arts to conceal the consequences of irregular connexions, are preventive checks that clearly come under the head of vice.” (Malthus, Essay,, 6th ed.,I.II.12)

It is interesting to read Place’s argument in favor of contraception,

“He is a visionary who expects to remove vice altogether, and he is a driveller who, because he cannot accomplish what is impossible to be accomplished, sets himself down and refrains fro doing the good which is in his power.” (p. 174)

Place concedes to Malthus that the use of contraception is a vice, but argues that, since we cannot remove it altogether, we might as well advocate it to control population growth. His ad hominen attacks on those who would object to his proposals as “visionaries” and “drivellers” are duly noted, e.g. Malthus. Of particular note are his predictions,

“One circumstance deserves notice, as an objection which will probably be made–would not incontinence be increased, if the means recommended were adopted? I am of the opinion it would not; so much depends on manners, that it would seem to be by no means an unreasonable expectation that if these were so improved, as greatly to increase the prudential habits, and to encourage the love of distinction, ‘the master of public prosperity,’ and if, in consequence of the course recommended, all could marry early, there would be less debauchery of any kind.” (p. 174)

For the modern reader, incontinence means “lacking in moderation or self-control, especially of sexual desire.”

It seems that the promotion of prudential habits, the love of distinction, and early marriage have been somewhat neglected, though Place’s recommendation to promote contraception was eventually enthusiastically adopted. Additionally, after 200 years, the evidence does not seem to indicate that contraception has led to “less debauchery.”

Malthus, Thomas, An Essay on the Principle of Population, 6th ed.,London: John Murray, 1826.

Place, Francis, Illustrations and Proofs of the Principle of Population, London: Allen and Unwin, 1930. First edition 1822.

What Happened in the Nineteenth Century?

“Wealthier men … tended to have more children in monogamous societies prior to the nineteenth century…. This positive relation between wealth and fertility in monogamous societies generally continued in rural communities throughout the nineteenth century…

Sometime in the nineteenth century… fertility and wealth became partially and wholly negatively related among urban families; evidence for German cities around 1900 can be found in Knodel, 1974…” (Becker, Treatise on the Family, p. 144)

Becker hypothesizes that, as households become wealthier, they prefer to have fewer children of higher quality instead of more children of lower quality. While I have my doubts about this theory, the interesting point is that, whether true or not, it was not always the case that wealthier households had fewer children. Historically, until very recently, wealthier households tended to have more, not fewer, children, which is what we would expect if children are normal goods.

With the rising levels of income and standards of living since the nineteenth century, demand for children–fertility–should have continued to rise. Why hasn’t it? Has there been a change in relative prices to cause households to substitute fewer children of high quality for more children of low quality? Or have household preferences changed in a fundamental way? Or is it possible that the effects of the Enlightenment and subsequent shift of culture away from Christianity diminished fertility rates?

Becker’s evidence raises another interesting question: is this difference between urban and rural fertility rates simply due to the fact that urban households tend to be wealthier than rural ones? Or is there something else about urban culture and urban life that affects household demand for children?

Teen Birth Rates in the U.S.

The National Center for Health Statistics recently reported that “Birth Rates for U.S. Teenagers Reach Historic Lows for All Age and Ethnic Groups.” There are a number of stories in the press based off of this report. The main finding from the report is the first bullet point:

“The U.S. teen birth rate declined 9 percent from 2009 to 2010, reaching a historic low at 34.3 births per 1,000 women aged 15–19; the rate dropped 44 percent from 1991 through 2010.”

This is a continuation of a trend that has been going on since about 1990. Falling teen pregnancy rates have led to fewer births and fewer abortions among teenagers. Evidence from the prevalence of STDs among teenagers, especially HPV, suggests that this is due to more prevalent and more effective use of contraception and not a reduction in sexual activity among teenagers. In Family Planning Perspectives (2000),  Panchaud et al.  show that the prevalence of syphilis, gonorrhea, and chlamydia are many times higher among teenagers in the U.S. relative to other developed countries.

The coincidence of low birth rates and high STD rates among teenagers is striking. The low birth rates suggests that contraceptive use and sexual activity among teenagers are accepted and expected by the majority of parents, who put their daughters on the Pill and then make sure that they take it regularly. However, the high STD rates suggest that either (1) parents are not as concerned about the prevalence of STDs among teenagers as they are of teenage pregnancy, or (2) they are not as effective at promoting the use of condoms as they are at promoting the Pill, or (3) that condoms are not as effective at preventing the transmission of STDs as the Pill is at preventing pregnancy. The truth is no doubt a combination of these three possibilities.

Hamilton BE, Ventura SJ, “Birth rates for U.S. teenagers reach historic lows for all age and ethnic groups,” NCHS data brief, no 89. Hyattsville, MD: National Center for Health Statistics, 2012.

Panchaud, Christine, “Sexually Transmitted Diseases Among Adolescents in Developed Countries,” Family Planning Perspectives, 23(1), January/February 2000.

Teen Birth Rates Keep Falling

Births per 1000 girls age 15-19 continue to fall.

Figure 1. Birth rates for women aged 15–19: United States, 1940–2010, and by age, 1960–2010

Figure 1 is a line graph of the annual birth rates for teenagers aged 15–19 between 1940 and 2010 and teenagers aged 15–17 and 18–19 between 1960 and 2010.

See the full CDC report:  Birth Rates for U.S. Teenagers Reach Historic Lows for All Age and Ethnic Groups

However, the number, rate and percentage of births to unmarried women of all ages continues to rise.

Figure 1 is a line graph showing the number of births to unmarried women, the birth rate for unmarried women, and the percent of births to unmarried women from 1940-2007.

See the full report on patterns of non-marital fertility here: Changing Patterns of Nonmarital Childbearing in the United States

Abortion Insurance Premiums and Profits under Obamacare

In my last post I talked about the $1 premium for abortion coverage under Obamacare. The rule can be found here. The document is 644 pages, so, for those interested, the action is all on pages 627-630. This Section §156.280 Segregation of funds for abortion services. In the language of the document, QHP is “qualified health plan,” i.e. a health plan issued through the exchanges.

Paragraph (d)(1) describes “abortions for which public funding is prohibited.” The segregated premium for insurance coverage for these abortion is described in (B) [of(e)(2)(i)] on p. 629. This premium is equal to  “the actuarial value of the coverage of services described in paragraph (d)(1) of this section.” Paragraph (4) [of (e)] on p. 630 specifies that the premium “(ii) Must estimate such costs as if such coverage were included for the entire population covered; and (iii) May not estimate such a cost at less than one dollar per enrollee, per month.”

What does it mean that costs must be calculated “as if such coverage were included for the entire population?” Note that abortion insurance is bundled with a QHP, so an enrollee is a person covered by a qualified health plan. The reference population for the insurance premium is evidently all enrollees with abortion insurance, or all enrollees in QHPs bundled with abortion insurance. For example, an employee with a five member family must pay $5 per month, since each one of the five members is enrolled in the plan. Bundling abortion insurance with QHPs and eliminating “opt-out” provisions effectively lowers the cost of abortion insurance by distributing the costs among all enrollees, a much larger group than all women who would voluntarily purchase abortion insurance. This larger group includes many people who cannot obtain abortions and who therefore cannot directly “benefit” from an abortion, such as men, children, and women beyond child-bearing age.

How much should abortion insurance cost for women? The rule specifies a $1 minimum or the expected costs of the population, assuming all women are covered. In 2008, women between 20-24 obtained about 350,000 abortions in the U.S. Here, for simplicity, I ignore Medicaid funding assume all abortions are privately funded . Using an average prices for an abortion of $500, the average cost for all 10.1 million women in that age range would be about $17.41 per year, or $1.45 per month. Women at these ages have the highest abortion rates. Average costs for women 25-29 are $1.08 per month, and less than one dollar per month for women in all other categories. The average cost of abortion for all women of child-bearing age is $8.05 per year, or $0.67 per month. Fair insurance premiums would be equal to these costs if all women in these categories elected to purchase abortion insurance, but higher if some women elect not to purchase the insurance because they would never obtain an abortion. The smaller the insured population, the higher the premiums.

When these costs are effectively distributed, not among women who may obtain an abortion, but among all enrollees, the average cost is much, much lower. This program channels the monthly premiums from enrollees to abortion providers and insurers. The monthly minimum premium of $1 is a binding constraint, well above the fair insurance price, so the program channels an amount money to abortion providers and insurers that far exceeds the actual cost of abortions. This rule effectively creates a pot of money that can only be used for abortions in the United States, to be divided up among the abortion providers and the insurers.

How big is the pot of money? The current population of the United States is 313 million, and about 50 million people are not covered by health insurance, leaving 263 million current enrollees. If 80% of these enrollees have QHPs with abortion insurance under Obamacare, monthly premiums would be $210.4 million. Fair insurance for this number of enrollees is only $0.26 per month, well below the $1 minimum. Premiums of $210.4 million per month add up to $2.52 billion per year,  far more than the projected costs of $660 million (1.32 million projected abortions at $500 each). This leaves a pot of $1.86 billion in excess of costs.  When these funds are made available, the price of abortions will tend to rise.

How much will the price of abortions rise? It will depend on the bargaining power of insurance companies vis-a-vis abortion providers. With an increase in abortions to 1.32 million that I predicted in an earlier post, the average price of an abortion could rise from $500 to as high as $1,900, i.e. $2.52 billion divided by 1.32 million abortions. This would be the case if the abortion providers had all of the bargaining power. Conversely, if insurers had all of the bargaining power, then they could keep the cost of abortions at $500 and reap profits of $1.86 billion. The truth is somewhere in the middle, though I hazard a guess that the abortion industry is more concentrated and in a better bargaining position, e.g. Planned Parenthood.

In light of this, my earlier assumption that 80% of QHPs would offer abortion insurance is likely a conservative estimate. Abortions and abortion insurance will become extremely profitable under this plan, and it may be very difficult to find a QHP that is not bundled with abortion insurance.

Will Americans Be Forced to Pay for Abortions under Obamacare?

Various news reporting agencies are reporting that purchasing abortion insurance will not be voluntary under Obamacare, but mandatory. The New American has an article here, and the Alliance Defense Fund has a press release here. These articles are based on this brief to the Supreme Court filed by the Bioethics Defense Fund and others.

Abortion insurance will be available through the health care exchanges established under Obamacare for a minimum monthly premium of $1. These premiums are segregated from other premiums and used exclusively to pay for abortions.

So will all Americans be required to purchase abortion insurance?  According to the brief, Americans may be required to purchase this insurance, but possibly not all of them. This insurance is not available separately, but packaged with health care plans. Americans will be forced to pay for this (1) if all available insurance plans cover abortion, so no alternative exists that does not cover them;  or (2) if their employers choose a health insurance plan that covers abortion; or (3) if they choose plans not knowing whether abortion would be covered, in which case they are forced to keep paying after they are enrolled until the next open enrollment period.

In the first case, Obamacare requires that all Americans purchase health care. Every American must then choose a plan from a state-regulated health care exchange. While a number of different plans will be available on each exchange and differ from state to state, every American must choose one. If every plan on the exchange covers abortion, then the requirement to purchase health care becomes a requirement to purchase abortion insurance, and, through the premiums, pay for abortions, either their own or others.

In the second case, Americans will be forced to pay for abortions if their employers choose health care plans that cover abortions. There is no provision by which an employee may “opt out” of the abortion insurance purchased by his employer. The employee will be forced to pay the monthly premiums, segregated and used exclusively for abortions.

In the third case, Americans may be forced to continue paying for abortions if they signed up for a health insurance plan that covered abortions without knowledge that they did so. While is not coerced in the same way as the other two cases, the provisions of the rule deliberately make it difficult for consumers to identify which plans will cover abortions. According to the rule, qualified health plans (QHPs) notify enrollees “only as part of the summary of benefits and coverage explanation, at the time of enrollment, of such coverage.” Here the emphasis is mine, but the “only” in this statement is in the provision. (See p. 15 of the brief.) Notice of coverage occurs only after enrollment, i.e. only after signing up for the plan, at which point the enrollee cannot choose another plan or opt out of the coverage until the next open enrollment period, typically a year later. Additionally, the rule disguises plans that cover abortions by specifying that “any advertising used by the issuer with respect to the plan, any information provided by the Exchange, and any other information specified by the Secretary shall provide information only with respect to the total amount of the combined payments…” (See pp. 15-16 of the brief.) Obviously, any plan that listed the segregated premium would signal to the consumer that it covers abortion.

So, yes, many Americans will be forced to purchase abortion insurance and pay for abortions under Obamacare, and many will do so unwittingly.

$1 Abortions in Obamacare

Fox News is reporting here that abortions will be covered under Obamacare for a monthly premium of $1. This reduces the marginal cost of obtaining to zero, a reduction in price of 100%. What effect will this rule have on abortions in the United States?

A fair estimate can be obtained by looking at evidence on the effects of Medicaid funding restrictions on abortion rates. Medicaid policies are set at the state level, with some states fund abortions while others do not. Like the HHS rule, Medicaid funding effectively lowers the price of abortions. Haas-Wilson estimates that Medicaid funding restrictions decrease minor’s demand for abortions by 9 to 17 percent. Similarly, Blank et al. estimate that Medicaid funding restrictions reduce abortions by 19-25% among low-income women. Taking the average of these estimates, Medicaid funding restrictions decrease demand for abortion by about 18% among Medicaid recipients.

Medicaid recipients have lower incomes and consequently higher price elasticities than the typical person affected by the new rule, i.e. an average person. The HHS rule can be expected to have a smaller effect among the people affected  than Medicaid funding restrictions on low-income persons. Therefore, the effects of Medicaid funding restrictions provide an upper bound to the magnitude of the effects of the rule.

A lower bound to the effect of the rule is zero. If the price of is relatively insignificant (about $500) and that all women who want abortions get them already, then the rule would have no effect. Without better information, the midpoint between the lower and upper bounds is a reasonable estimate of the magnitude of the effects: the HHS rule will likely lead to a 9% increase in demand for abortions.

According to the Census, there were 1.21 million abortions in 2008. A 9% increase the number of abortions by 110,000 to 1.32 million per year.

A 9% increase in demand for abortions is likely a conservative estimate of the effect of the rule. Gohmann and Ohsfeldt estimate that the price elasticity of abortion is between -0.75 and-1.3. With a 100% reduction in the price of an abortion, this elasticity implies an increase in demand between 75% and 130%. This estimate seems unrealistically large, especially given the fact that abortions are already relatively inexpensive and most women who want to obtain them can probably afford to pay for them.

 

Blank, R.M., C.C. George, and R.A. London, “State Abortion Rates: The Impact of Policies, Providers, Politics, Demographics and Economic Environment,” Journal of Health Economics 15: 513-553, 1996.

Gohmann and Ohsfeldt, “Effects of Price and Availability on Abortion Demand,” Contemporary Policy Issues, 11(4):42-55, 1993.

Haas-Wilson, D., “The Impact of State Abortion Restrictions on Minors Demand for Abortions,” Journal of Human Resources 31:140-158, 1996.

Can the State Make You a Daddy?

Joe and I plan to post on a few of the interesting papers we attended at the AEA annual meeting in Chicago in early January.  Here is one I found memorable: Maya Rossin-Slater, a PhD candidate at Columbia, has nearly finished a remarkable comprehensive study of the causal effects of in-hospital paternity establishment programs (IHVPE) on paternity establishment rates, marriage behavior, and father-involvement post childbirth.  The study exploits variation in state timing of IHVPE program initiation, together with data from the Office of Child Support Enforcement, and the Current Population Survey-Child Support Supplement.  The study provides evidence that IHVPE programs increase paternity establishment by 34%, and that these programs reduce the likelihood of marriage post-childbirth.  Rossin-Slater explores a simple model in which fathers are heterogeneous in partner quality, such that for some (very) low quality fathers, women prefer to receive lower levels of support outside of marriage (with no partnership), than higher levels within a marriage to a low-quality partner.

The losers in this game–as usual–may just be the children.  Rossin-Slater provides some evidence that children treated with IHVPE programs are less likely to receive health insurance from a member of the family.  Read as a crude measure of father involvement, we learn–intriguingly enough–that state attempts to “establish paternity” succeed in doing just that.  But only that.  They don’t seem to be able to make fathers into dads.

The abstract and paper link can be found here:
http://www.columbia.edu/~mr2856/research.html