Overturning Roe V. Wade Would Have ‘Very Damaging’ Economic Effects, Treasury Secretary Warns

Topline

Restricting access to abortion “would have very damaging effects on the economy,” Treasury Secretary Janet Yellen testified to the Senate Tuesday as the Supreme Court appears poised to overturn Roe v. Wade, testimony that’s backed up by numerous studies showing restricting abortion has a negative economic impact on both the patients who are denied the procedure and the economy at large.

Treasury Secretary Janet Yellen testifies during a Senate Banking, Housing, and Urban Affairs … [+] Committee hearing on May 10 in Washington, DC.

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Key Facts

Yellen testified to the Senate Banking Committee that access to abortion benefits the economy by allowing more women to be in the workforce and get an education—which increases their earning potential.

For instance, after abortion restrictions were lifted following Roe v. Wade in 1973, Black women’s participation in the labor force increased by 6.9 percentage points, a 2000 study published in Research in Labor Economics found, though among white women it only increased by two points.

Yellen also noted abortion access helps keep more people out of poverty and in need of public assistance, and it improves children’s well-being and earning potential by extension.

A decade-long study that tracked 1,000 women—some of whom obtained abortions and some who were turned away from getting one—found those denied an abortion were more likely to experience household poverty, be unable to cover basic living expenses, have a lower credit score, have more debt and experience issues like bankruptcy and eviction — findings that were part of the Turnaway Study.

Women who were denied an abortion in the Turnaway Study experienced a 78% increase in the amount of debt they owe as compared with pre-pregnancy and have 81% more public financial records like bankruptcies and evictions, and this “financial distress” continued for at least five years after their children were born, according to a working paper from the National Bureau of Economic Data.

All of this impacts the economy as a whole: state-level abortion restrictions cost U.S. state economies a combined $105 billion per year—due to reduced labor force participation and earning levels, along with more time off and turnover at workplaces—and if all state abortion restrictions were eliminated, the U.S. GDP would increase by nearly 0.5%, according to research from IWPR published in 2021.

Individual states that restrict abortion face significant economic penalties for doing so: abortion bans and restrictions costs Texas $14 billion per year, IWPR estimates, while Missouri’s GDP would increase by 1.02% if all abortion restrictions were lifted.

Big Number

$1,610. That’s how much higher 15 to 44-year-old women’s earnings would be on average if all state-level abortion restrictions were eliminated, IWPR estimates. Lifting restrictions would allow 505,000 additional women ages 15-44 to join the workforce, earning a combined $3 billion per year, and women who are already employed would earn a combined $101.8 billion more annually.

Surprising Fact

Even Democratic-led states that have permissive laws on abortion are negatively impacted economically by restrictions on the procedure, despite those laws being largely concentrated in other states. California and New York, for instance, had $5.5 billion and $4.1 billion in economic losses in 2020 due to abortion restrictions, IWPR found. The impact of all state-level abortion restrictions being lifted would be less pronounced in those states, however: California’s GDP would only increase by 0.17% and only 0.49% more women ages 15-44 would join the workforce, as compared with a 2.15% labor force increase in Oklahoma and Texas.

Crucial Quote

“I believe that eliminating the right of women to make decisions about when and whether to have children would have very damaging effects on the economy and would set women back decades,” Yellen testified Tuesday.

Chief Critic

Sen. Tim Scott (R-S.C.) hit back at Yellen’s comments Tuesday as “harsh” and “unusually piercing.” “I think framing [abortion] in the context of labor force participation just feels callous to me,” Scott said during the hearing, arguing senators should focus on issues like child tax credits, childcare infrastructure and other measures to instead “address the issue around the child that’s here.” (“This is not harsh, this is the truth,” Yellen countered in response.)

Key Background

The Supreme Court may soon overturn Roe v. Wade, according to a draft opinion leaked by Politico showing a majority of justices favor striking down the 1973 ruling. The draft is from February in a case concerning Mississippi’s 15-week abortion ban and Chief Justice John Roberts has said it should not be taken as the court’s final opinion, though the Washington Post reports a majority of justices still backed overturning the ruling as of last week. The potential ruling could lead to 26 states banning abortion, the pro-abortion rights Guttmacher Institute projects, after many have already moved in recent months to restrict the procedure. Texas now bans all abortions after six weeks of pregnancy, for instance—and Idaho and Oklahoma have followed suit, though Idaho’s policy is now blocked—and Florida and Arizona have enacted their own 15-week bans in advance of the court’s ruling.

Overturning Roe V. Wade Would Have ‘Very Damaging’ Economic Effects, Treasury Secretary Warns—Here’s How