Abortion bans can lead to economic costs for states

The Supreme Court’s decision to overturn Roe v. Wade and allowing states to decide their own position on abortion access has led to 16 states shutting down nearly all services. An economic fallout could come next.

Abortion rights advocates have said lack of access to reproductive care can lead to poverty or debt and pregnancy can be costly, according to data from the Centers for Disease Control and Prevention. Abortion restrictions also disproportionately affect women of color, according to research by the Institute For Policy Women’s Research. This study also stated that “currently employed women ages 15 to 44 would earn $101.8 billion in additional income per year if all state-level abortion restrictions were removed.

Stanford economist Mark Duggan described two ways states that have restricted access to abortion may feel a negative impact from the decision during a phone call with ABC News. One of them is the direct impact of unwanted pregnancies.

Potential economic impact of abortions

Studies, such as one from the National Library of Science, have concluded that women who have been denied abortions can face economic hardship that lasts for years. Another study by the United States Department of Agriculture calculated that raising a child costs a quarter of a million dollars, a price that can bankrupt people if they are not prepared. Finally, one of the leading studies – The Turnaway Study – found that “denying an abortion results in worse financial, health, and family outcomes.”

“It can really disrupt their economic trajectory in a gigantic way,” Duggan said of people who have turned away from abortion care.

However, there is disagreement with the previously cited studies. Prior to Dobbs v. Jackson who overthrew Roe, 240 women released an amicus brief to discredit the negative economic impacts associated with abortion restrictions that numerous studies have found. The amicus dismissed the Turnaway study and other studies due to scientific biases and flaws and noted that the Turnaway study and several others are funded in whole or in part by pro-choice groups.

The Alamo Womens Reproductive Services waiting room is empty because just an hour before the Supreme Court overturns Roe v. Wade closing abortion services at Alamo Womens Reproductive Services, June 24, 2022, in San Antonio, Texas.

Los Angeles Times via Getty Images

The departure of companies

The second economic impact that reducing abortions can have on a state is less direct and involves companies potentially becoming less motivated to grow and expand in places where their employees cannot receive abortion care.

Duggan thinks these new restrictions “will create a headwind in some of the more restrictive states. [abortion] economic policies.

The economic fallout from abortion restrictions may be compounded by the fact that many of the states that have taken the toughest stance are also the poorest states by many leading indicators. As of this week, Kentucky, Louisiana, South Dakota, Texas, Mississippi, Alabama, Arkansas, Oklahoma and Missouri have what is called an abortion ban – where abortions are prohibited except in rare circumstances such as the potential death of the mother. Of these nine states, six of them are in the top ten for the highest poverty rate among all states. Five of the nine countries are among the ten lowest for tertiary attainment rates. Five of the states make up the top five in teen birth rates with seven of the nine in the top ten. These factors strain a state’s economy by reducing taxable income and increasing welfare budgets.

The extent to which abortion rights will be factored into corporate decision-making is unclear. Mark Showalter, professor of economics at Brigham Young University, pointed out that companies are primarily focused on profit margins.

“If they have to choose between an abortion-restrictive Texas where the business climate is more business-friendly than a abortion-unrestricted but business-unfriendly California, it’s not clear what the companies will do,” Showalter wrote in an email to ABC News.

ABC News contacted the nine states to ask if they were concerned about further widening the gap between themselves and the rest of the country by passing potentially costly legislation. Texas was the only state to respond.

“Texas’ economy is booming,” said Governor Greg Abbott’s press secretary Renae Eze. “Businesses are moving and investing in the Lone Star State at a record pace because we’ve built a framework that allows free enterprise to thrive and hard-working Texans to thrive.”

Texas is an outlier among the other eight states as its wealth falls off most of the rankings above. The Lone Star State has enjoyed economic success and a influx of businesses move there to avoid the high costs of states like California. However, the concern for Texas and other states is not their current status, but rather whether the decision to restrict abortions will be costly down the road.

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