The Earned Income Tax Credit and abortion

► I examine the relationship between the Earned Income Tax Credit (EITC) and abortion. ► Analyses rely on state panel data between 1975 and 2005. ► Increases in the EITC are associated with reductions in the overall abortion rate. ► Declines in abortions are attributable to changes pregnancies rathe...

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Bibliographic Details
Published in:Social science research 2011-11, Vol.40 (6), p.1638-1651
Main Author: Herbst, Chris M.
Format: Article
Language:English
Subjects:
Abortion
Birth
Correlation analysis
Decisions
Earned income
Earned Income Tax Credit
Evidence
Females
Fertility
Fiscal policy
Income
Panel data methods
Pregnancy
Sexual Behavior
Sexual behaviour
Social sciences
Tax credits
Taxation
Taxes
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Summary:► I examine the relationship between the Earned Income Tax Credit (EITC) and abortion. ► Analyses rely on state panel data between 1975 and 2005. ► Increases in the EITC are associated with reductions in the overall abortion rate. ► Declines in abortions are attributable to changes pregnancies rather than births. Using a panel of states between 1975 and 2005, I examine the relationship between the Earned Income Tax Credit (EITC) and abortion. Results suggest that increases in the EITC are associated with reductions in the overall abortion rate. Specifically, a $1000 increase in the maximum credit is associated with a 7.6% decrease in the overall abortion rate. This effect implies a reduction of approximately 1.6 abortions per 1000 women of childbearing age. I also provide evidence that the reduction in abortions is attributable to a drop in pregnancies, not an increase in the number of births. In other words, women appear to respond to increases in EITC generosity by altering sexual behavior, rather than shifting abortion–birth decisions after a pregnancy occurs.
ISSN:0049-089X
1096-0317
DOI:10.1016/j.ssresearch.2011.05.003