How Economic Inequality Causes Unmarried Teens To Have Babies

Commentary about business and finance.
May 14 2012 5:01 PM

Why Are Teen Moms Poor?

Surprising new research shows it’s not because they have babies. They have babies because they’re poor.

Teenage Mom.
Surprising new research shows that babies don't make teen moms poor. Being poor causes them to have babies.

iStockphoto.

Delivering the commencement address last weekend at the evangelical Liberty University, Mitt Romney naturally stuck primarily to “family values” and religious themes. He did, however, make one economic observation that intersects with some fascinating new research. “For those who graduate from high school, get a full-time job, and marry before they have their first child,” he said, “the probability that they will be poor is 2 percent. But if [all] those things are absent, 76 percent will be poor.”

These are striking numbers, but they raise the age-old question of correlation and causation. Does this mean that the representative high-school dropout would be doing much better had he stuck it out in school for a few more years? Or is it instead the case that the population of high-school dropouts is disproportionately composed of people who have attributes that lead to low earnings?

When it comes to early pregnancy, surprising new evidence indicates that Romney and most everyone else have it backward: Having a baby early does not hamper a young woman’s economic prospects, as Romney implies. Rather, young women choose to become mothers because their economic outlook is so objectively bleak.

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The problem of teen/single/unwed motherhood is one of the relatively few issues liberals and conservatives seem to be able to agree on these days. The right is more likely to pitch the issue in terms of marital status (“single moms”) and the left in terms of simple age (“teen moms”), but both sides reach the same basic conclusion. Raising a child is difficult. Raising a child without help from a partner is very difficult. Doing it at an early age is going to substantially disrupt one’s educational or economic life at a critical moment, with potentially devastating consequences for one’s lifetime. Therefore, preventing early nonmarital pregnancies (whether through liberal doses of contraception and sex education, or the conservative prescription of abstinence cheerleading) would seem universally desirable.

But perhaps we’re approaching the problem from the wrong direction, according to Melissa Kearney and Phillip Levine in a new paper “Why is the Teen Birth Rate in the United States So High and Why Does It Matter?” published in the spring issue of the Journal of Economic Perspectives.

They conclude that “being on a low economic trajectory in life leads many teenage girls to have children while they are young and unmarried and that poor outcomes seen later in life (relative to teens who do not have children) are simply the continuation of the original low economic trajectory.” In other words, it is a mistake to the leap from the observation that women who gave birth as teenagers are poor to the view that they’re poor because they gave birth. Lexus owners are much richer than the average American, but that doesn’t mean the average person can get ahead by buying a Lexus. Women with better economic opportunities tend to do a good job of avoiding childbirth.

Kearney and Levine used data on miscarriages to isolate the impact of giving birth from background characteristics that may contribute to a decision to give birth. When used this way as a statistical control, the negative consequences of teen childbirth appear to be small and short-lived. Young women who gave birth and young women who miscarried have similarly bleak economic outcomes.  Similarly, when you compare teen mothers not to the general population but to their own sisters who aren’t teen moms “the differences are quite modest.”

The researchers also discovered that very few policies appear to affect teen birth rate, including abortion policies and sex ed. (Although stingier welfare benefits do appear to cut birthrates a bit.)

What really causes birthrates to vary are demographics and state-level economic variables. In particular, teen girls whose mothers have little education are much more likely to give birth than girls with better-educated mothers. Even more interesting is the way that economic inequality amplifies nonmarital births to teen moms. In particular, “women with low socioeconomic status have more teen, nonmarital births when they live in higher-inequality locations, all else equal.” The measure of inequality used here is not the fabled gap between the 1 percent and the 99 percent, but the gap between the median income and incomes at the 10th percentile. It measures, in other words, the gap between poor people and the local typical household.* It may be a proxy for how plausible it would be for a girl from a low-income household to rise into the middle class. The more difficult that rise seems, the more births there are to unmarried teens.

The upshot is that teen motherhood is much more a consequence of intense poverty than its cause. Preaching good behavior won’t do anything to reduce its incidence, and even handing out free birth control won’t contribute meaningfully to solving economic problems. Instead, family life seems to follow real economic opportunities. Where poor people can see that hard work and “playing by the rules” will reward them, they’re pretty likely to do just that. Where the system looks stacked against them, they’re more likely to abandon mainstream norms. Those who do so by becoming single teen moms end up fairing poorly in life, but those bad outcomes seem to be a result of bleak underlying circumstances rather than poor choices.

Clarification, May 14, 2012: This sentence originally described the gap between the median income and incomes at the 10th percentile as a difference between a poor household and an "average" one, an imprecise use of that word. (Return to the revised sentence.)

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