The Pill and women’s wages

An Ortho Tri-Cyclen dial pack



FORBES 3/30/2012
Meghan Casserly, Forbes Staff

The short-term and far-reaching economic effects of your $50 a month Ortho Tri Cyclen

A new working paper from the University of Michigan draws another heavy underline on the importance of access to birth control for women’s long-term earning potential. After cross-examining wage and education data for women born between 1943 and 1954, economist Martha Bailey estimates that one third of women’s wage gains since the 1960s were made possible by the Pill.

Economists, sociologists, and just plain women have long understood the correlation between contraception and career, but it’s been difficult to put numbers to. “The difficulty of parsing the Pill’s effect on women’s careers relates to the timing of its appearance,” said Bailey, the chief researcher of the working paper in a statement. “By cause or coincidence, the pill’s diffusion coincided with important changes in norms and ideas about women’s work and the end of the baby boom.”

But it’s clear that as the Pill provided younger women with more control over childbearing, the number of women seeking higher education and traditionally male-dominated careers spiked. The group most affected were women with access to contraceptives at the age of 18, whose college plans were not derailed by motherhood. These women invested in their education and careers and were rewarded with what Bailey calls “remarkable wage gains over their lifetimes.”

Researchers married data on women’s wages and education from the National Longitudinal Survey of Young Women, with 21 interviews of more than 5,000 women, focusing on those born between 1943 and 1954. For these women, early access to the pill varied. After the Enovid birth control pill was approved in 1960, not all states prescribed the contraceptive to unmarried women without parental permission. As a result, some women had early access to the Pill at 18 while others waited until 21. Early access laws doubled contraceptive pill use among women between the ages of 18 and 20. Pill use by age 18 was 140% higher, and by age 20 was 43% higher than the national average.

Bailey and her colleagues tracked the wages of women born in this critical period to measure the impact of early access on lifetime earnings. The results, which will be published in a National Bureau of Economic Research working paper in the July issue of American Economic Journal: Applied Economics, show that women in states where the pill was accessible at 18 were making 8% more each year by the 1980s than their counterparts who hadn’t had access until later.

Economist Nancy Folbre, a professor at Amherst college with an eye on the intersection between family planning and the economy says she finds Bailey’s new research encouraging, particularly because it looks at early access laws and their far-reaching effects. “It exploits differences in state policies to show the impact of public policy,” she says, a particularly salient point given the ongoing and often arduous debate over women’s health being waged this election year.

Of the 30% increase in women’s wages the study attributes to early access to the Pill, two-thirds of that came from these women having greater workplace experience. The rest came from women’s access to education and their resulting choices to enter high-earning, male-dominated fields.

While encouraging, particularly in light of the ongoing and arduous contraception debate raging this election year, this most recent research only supports the position of economists and sociologists who’ve long asserted the “Power of the Pill” on the economics of womanhood, most famously economists Claudia Goldin and Lawrence Katz. This isn’t Bailey’s first time at the rodeo either. She is widely published on the issue; her 2006 paper “More Power To The Pill: The Impact of Contraceptive Freedom on Women’s Life Cycle Labor Supply famously highlighted the impact of family planning on women’s access to education, higher paying jobs and a lifetime of better pay

But the Pill’s economic powers are further reaching than the paychecks of the women who now number 50% of the workforce. According to Folbre, long-term benefits of contraception include the reduction of both unplanned births and abortions. In a 2009 op-ed for the Times, she pointed readers to 2007 research by Melissa Kearney and Phillip Levine that estimated the cost-savings from each averted birth at $6,800. At roughly 1.2 million abortions performed each year, that’s more than $8 billion.

“Access to birth control is a health issue, and it’s also a pocketbook issue,” says Planned Parenthood president Cecile Richards, who I’ll leave with the last word. “This study confirms what millions of women already know: our opportunities and options are expanded when we have access to birth control. That’s why recent attacks on access to birth control are far outside the mainstream and will backfire politically.”