Income Inequality, Economic Despair, and Teen Childbearing

Despite a decline of almost 50 percent over the past two decades, rates of teen childbearing in the United States are twice as high as in Canada and Australia, three times higher than in Germany, and eight times higher than in Switzerland.
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Teens in the United States are considerably more likely to give birth than their counterparts in other developed countries. Despite a decline of almost 50 percent over the past two decades, rates of teen childbearing in the United States are twice as high as in Canada and Australia, three times higher than in Germany, and eight times higher than in Switzerland. There are also tremendous differences across states within the United States. A teen in Mississippi is four times more likely to give birth than a teen in New Hampshire.

Past research, including our own, is generally unable to account for these patterns. Differences in welfare policy, abortion policy, sexual education policies, and other targeted policy measures can account for only a very small fraction of the variation in teen childbearing over time and place. In our recent research, we consider an alternative hypothesis: differences in the extent of income inequality across places are in part responsible for differences in teen childbearing rates.

It is well-established that girls who grow up economically disadvantaged are much more likely to become teen mothers than other girls. Our recent research builds on this observation by examining how broad economic conditions, such as poverty rates and income inequality, affect the childbearing and marriage decisions of young, economically disadvantaged women. Prominent research going back several decades in sociology and ethnography emphasizes the role of social isolation and economic marginalization or "despair" in driving the decision to have a baby when young and unmarried. We use the statistical tools of economics and nationally-representative data to explore this idea in a concrete way. In particular, we investigate how rates of early, non-marital childbearing among the economically disadvantaged vary across places based on the social, political, and economic conditions in those places.

Our empirical analysis yields striking results -- lower-tail income inequality (which captures differences between the middle and the bottom of the distribution) emerges in the data as having a strong effect on rates of teen childbearing among economically disadvantaged girls. This relationship holds true controlling for other important differences across individuals -- including race, ethnicity, and background family structure -- and across states -- including welfare and abortion policy, political and religious composition, poverty rates, minority concentration, among others. To be clear, we confirm the well-known finding that young women at the bottom of the economic ladder are more likely than their economically advantaged peers to give birth when young and unmarried. But more interestingly, we find that economically disadvantaged girls who live in more unequal places are relatively more likely to give birth when young and unmarried than are their counterparts in more equal places. Furthermore, we estimate that differential rates of inequality across locations can explain a significant portion (upwards of half) of the geographic variation in observed teen childbearing rates.

Our interpretation of these findings is that young, unmarried, poor women choose to have babies when they view their opportunities for economic advancement as being limited. Greater income inequality, which is strongly linked to limited economic mobility, may be thought of as a proxy for how hard it is to improve one's socioeconomic position. In other words, young, poor women living in more unequal places may be even more likely to view their lives through this lens of economic "despair." If so, this would drive the empirical link we document between lower-tail income inequality and rates of early, non-marital childbearing. When women believe they have the opportunity to advance, they are more likely to "play by the rules." When they do not, they are more likely to "drop out" of the economic mainstream, which could mean giving birth at a young age outside of marriage.

Our findings have important implications for public policy with regard to teen childbearing. It is not surprising, based on our results, that narrowly targeted policies that focus on sex education, contraceptive access, and abstinence only programs have limited success, because they do not address the underlying social problems that drive much of teen childbearing in this country. To reduce rates of teen childbearing in the United States to a level comparable to that of other developed countries, much broader policies are required, in particular, policies that improve the life chances of young, economically disadvantaged women and their male partners. It is not simply enough to teach young women about abstinence or contraception or to make contraception more easily available to them; they need to be convinced that they have productive options to teen motherhood, including educational attainment, economic opportunities, and desirable marriage partners.