Roe v. Wade Reversal Will Damage the U.S. Economy

Roe v. Wade Reversal Will Destroy the U.S. Economy

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The Supreme Court has overturned the federal constitutional right to abortion provided by the 1973 Roe v. Wade ruling. This ruling has several implications, not just for women but for all of us. Economists warn that this will hurt the economy and directly impact our wallets.

As part of recently concluded court proceedings, 154 economists submitted an Amicus Brief warning about the economic impact of taking away the right to choose from a large percentage of the country’s labor force.

The critical impacts on the US economy are summarized below.

 

1. Fewer Women in the Workforce Will Lower U.S. Gross Domestic Product (GDP)

The number of employed people in the workforce drives a country’s GDP, as people spend on goods and services. In the 49 years since Roe v. Wade, women’s labor participation rate has consistently increased, driving a large portion of America’s GDP.

“Roe v. Wade and access to reproductive health care, including abortion, helped lead to increased labor force participation. It enabled many women to finish school. That increased their earning potential. It allowed women to plan and balance their families and careers.” – Janet Yellen, Treasury Secretary

In the last two years, America has witnessed a wave of resignations across the country. Disillusioned by low wages, lack of affordable child care, and significant pay gaps, women left their jobs in higher numbers than men. In May 2022, there were 650,000 fewer women in the workforce than in February 2020.

Now, women across the country feel further disenfranchised by losing their freedom of choice and control over their own bodies. If they leave the workforce in larger numbers, our economy could be in trouble.

A study by the Institute of Women’s Policy found that if the government eliminated abortion restrictions across the country, 505,000 more women aged 15 to 44 would be in the labor force. These women would earn over $3.0 billion annually to drive the country’s economic growth engine.

 

2. Banning Abortion Could Push More People Below the Poverty Line

University of California’s Turnaway Study found that household finances are one of the main reasons women choose abortion. One of the study’s key conclusions is that women restricted from getting abortions end up in worse financial, family, and health situations.

“Women denied a wanted abortion who have to carry an unwanted pregnancy to term have four times greater odds of living below the Federal Poverty Level (FPL).” – Turnaway Study, University of California

Economists submitted some related outcomes to this in the Amicus Brief:

  • The abortion ban will disproportionately impact young women and women of color because 60% of abortions are from women in their 20s, and 60% are non-white.
  • Post-legalization in the 70s, the rate at which teenagers became mothers dropped by a third. Reversing this trend could be disastrous, as fewer women complete college, get jobs or even work from home, and find themselves financially stable enough to raise children.
  • Welfare receipts declined after the states legalized abortions. The reversal of this trend will be a burden on all our wallets.
  • Considering that 49% of abortion patients are already below the poverty line, and another 26% are just above it, children born in these circumstances are much more likely to grow up in poverty and apply for social benefits.

 

Danielle Muira of Spark Financials sums it up: “Women who are denied an abortion are more likely to need government financial assistance and more likely to raise children in poverty. Limited access to abortions will increase the number of disadvantaged children who are not able to achieve their developmental milestones.”

 

3. Inadequate Policies Will Hurt Women’s Careers

Per a paper published by the National Bureau of Economic Research, women are the primary caregivers in America, but there aren’t adequate policies in place to support working caregivers.

The United States is the only advanced economy that does not guarantee paid maternity leave, with less than 16% of private-sector employees having access to it. The recent decision by the Supreme Court will only exacerbate the effects of a lack of policies in place to support women’s careers. As women leave the workforce in unprecedented numbers, many will take lower-paid jobs for flexibility and fulfill caregiving duties. All of this has a direct impact on the economic output of the country.

While the gender pay gap is well known, women’s careers and net worth suffer further after having children. Data shows that women make 6% less after having a kid, while men earn 4% more on average.

Adding to this pain is the rising cost of childcare. As per a study by LendingTree, U.S. parents spend an average of 29% of their pay on child care for a child under five years of age. The costs keep rising, with an average of 5% to 7% increase each year across the nation. It could cost parents between $9000 to $12,400 yearly per child for center-based child care, as per the study.

With costs this high, more women will be forced to become primary caregivers and stay home, removing themselves from the labor force.

On the flip side, the data also shows that access to abortion benefits women’s careers.

  • A 2020 analysis of labor market outcomes showed that young women who used abortion to delay motherhood by one year realized a 10% increase in hourly wages later in their careers.
  • The same analysis also shows that women who utilize abortion for unintended pregnancies have a 40% higher probability of entering a professional occupation. This is partially because over 60% of women who pursue abortion are in their 20s.

 

Final Thoughts

Denying women a wanted abortion may have negative developmental and socioeconomic consequences for women, their children, and society. Women make up almost 50% of the U.S. workforce. The U.S. economy will shrink as they choose to stay at home due to the high costs of childcare and a lack of supportive policies. Blaine Thiederman of Progress Wealth Management says it best: “An economy that doesn’t make full and efficient use of its labor force is never as strong as one that does.”

In the long run, banning abortions will result in a more significant burden on social benefits, ultimately leading to higher costs and more taxes.

Featured Image Credit: Pexels.

Ash & Pri

Ash & Pri are the Founders of AshandPri.com and have spent the last decade building their way towards financial freedom and a lifetime of memories. Having successfully achieved their early retirement goal in under 10 years, they look forward to sharing their financial sense with like-minded people. Read more about Ash & Pri in the 'About Us' section.