Academic journal article Contemporary Economic Policy

Health Insurance, Fertility, and the Wantedness of Pregnancies: Evidence from Massachusetts

Academic journal article Contemporary Economic Policy

Health Insurance, Fertility, and the Wantedness of Pregnancies: Evidence from Massachusetts

Article excerpt

I. INTRODUCTION

Although the Patient Protection and Affordable Care Act (ACA) of 2010 is the first successful attempt in the United States to provide near-universal health insurance coverage at the national level, similar policies have been implemented at state and local levels in prior years. (1) Among these regional reforms, the Massachusetts health care law of 2006--which includes an individual mandate requiring all state residents to obtain health insurance--is the most prominent. Over the years, researchers have used the Massachusetts experience to determine how its new health care law affected health coverage, outcomes, costs, and other critical issues. Given that the Massachusetts legislation served as a model for the design of the ACA, the answers to these questions have broader implications at the national level.

It has been shown that coverage rates increased and out-of-pocket costs from expensive medical events (like pregnancy) decreased due to the Massachusetts reform (Long, Stockley, and Yemane 2009). (2) Thus, the reduced cost of pregnancy may have incentivized women of childbearing age who were previously uninsured to plan and carry out a pregnancy. In addition to lowering the out-of-pocket costs of having a baby, the Massachusetts law also lowered the costs of preventing a pregnancy by increasing access to reliable contraception and family planning services. As a result, women who did not want to get pregnant might have increased their use of reliable birth control and thus decreased their fertility rates.

In this paper, we use the exogenous changes generated by Massachusetts' health care reform to identify the effect of insurance coverage on fertility. We rely on the American Community Survey (ACS), which explicitly asks questions on fertility. Straightforward difference-in-differences estimates reveal no substantive change in fertility. Since baseline insurance coverage rates varied based on socioeconomic characteristics (rather than just by state and year), we further parameterize the changes in insurance coverage. Even with this parameterized specification, we do not find an effect on realized fertility when we examine all women or stratify the sample by age alone. Our key finding emerges when we stratify by both age and marital status: insurance coverage increased fertility for married women aged 20-34 by roughly 1% and decreased fertility for unmarried women of the same age by 8%. These opposite-signed results are consistent with different degrees of pregnancy wantedness and different behavioral responses to insurance coverage. These effects cancel out in the aggregate. Fertility for teenagers and older women did not change, which is unsurprising because teenagers experienced small gains in insurance coverage (hence, identification is more difficult) and older women have low fertility rates (hence, there is a heterogeneous behavioral response). The results are fairly robust to the inclusion of different sets of control variables and a variety of specification checks.

We also examine and confirm some of the underlying assumptions regarding pregnancy wantedness, physician access, and contraceptive use--all necessary conditions for finding opposite-signed fertility effects. Unlike the fertility results, where we exploit the quasi-experiment of the Massachusetts reform, our analysis cannot establish causality and is thus inherently more speculative due to limited data. Nonetheless, the correlations are consistent with our explanation of fertility patterns, and the overall magnitudes mirror the fertility findings.

II. LITERATURE REVIEW

This paper contributes to a literature evaluating the Massachusetts health care reform, in which insurance coverage and health care utilization are two principal outcomes. (3) Our study is the first to examine fertility behavior in this setting. Moreover, unlike existing studies evaluating the fertility effect of insurance mandates, we recognize that marital status (which is broadly consistent with pregnancy wantedness) may differentially affect individuals' responses to newly found health insurance and test this hypothesis in the context of the Massachusetts health reform. …

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