IN 1999, THE NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES STATED: "The annual comprehensive cost of STDs in the United States is estimated to be well in excess of $10 billion." (1) Today more than 20 STDs have been identified and, again according to the National Institute of Allergy and Infectious Diseases, they "affect" approximately 13 million men and women each year. Generally speaking, STDs can be either viral (as in the case of HIV and herpes) or bacterial. This article focuses on the effect of welfare payments on the incidence of three types of bacterial STDs: chlamydia, gonorrhea, and syphilis. All three of these STDs are targets of federally funded control programs and are the only STDs for which long-term data are available.
According to the Centers for Disease Control and Prevention (CDC), the chlamydia incidence rate for 1998 was 236.6 per 100,000 persons, and its prevalence has generally declined over time. Screening programs indicate that the highest incidence of chlamydia in women is among adolescents. Furthermore, chlamydia is highly prevalent among economically disadvantaged female adolescents--the same population who are likely to qualify for welfare assistance.
The gonorrhea incidence rate for 1998 was 132.9 cases per 100,000 persons. The incidence of gonorrhea declined from the mid-1970s to 1997, although an increase was reported between 1997 and 1998. Female gonorrhea rates are highest among those 15 to 19 years old. Also in 1998, the incidence rate for primary and secondary syphilis was 2.6 per 100,000 persons--the lowest rate recorded since 1941 when national reporting began. Syphilis today is primarily a regional problem, with 91 percent of the counties reporting syphilis cases in 1998 being located in the South.
This article explores the possibility that the spread of sexually transmitted diseases may be unwittingly encouraged by public policy. Specifically, we argue that if welfare payments lower the cost of unprotected sexual relations, they play a role in the incidence of STDs. In the next section we present our logical argument. In the subsequent three sections, we review the literature, specify our model, and present our empirical findings.
AFDC PAYMENTS, OR WHAT IS GENERALLY REFERRED TO AS "WELFARE," have long been a topic for study by economists. Among the most studied aspects of any income transfer is how the recipients' behavior is altered. The literature has had much to say regarding, for example, how rates of fertility (2) and illegitimacy are affected by AFDC payments. As Ozawa (1989), Caudill and Mixon (1993), and Clarke and Strauss (1998) have determined, the magnitude of financial transfers to unwed mothers is positively related to rates of fertility and illegitimacy. The rationale is that these welfare payments lower the cost of bearing and raising children. In addition to an increase in fertility, AFDC payments may have some impact on the number of children put up for adoption and the number of aborted pregnancies that occur.
The relationships described above are "downstream" outcomes of "upstream" behavior. Specifically, for there to be increases in fertility, children offered for adoption, and abortions, it must be the case that first there has been an increase in unprotected sex. After all, unprotected sex is generally a requirement for pregnancy. As Ressler, Waters, Hill, and Watson (2005) point out, because such sex also is correlated with the risk of contracting HIV, AFDC payments are positively correlated with HIV incidence rates per state. It should also be the case that AFDC payments are positively related to the propensity to contract other STDs, such as chlamydia and gonorrhea.
Given the opportunity to have unprotected sex, a woman's choice is assumed to be a function of the perceived costs and benefits that she will bear from this action. …