This paper uses a unique natural experiment to investigate the sensitivity of American college women’s contraceptive choice to the price of oral birth control and the importance of its use on educational and health outcomes. With the passage of the Deficit Reduction Act of 2005, Congress inadvertently and unexpectedly increased the effective price of birth control pills (“the Pill”) at college health centers more than three-fold, from $5 to $10 a month to between $30 and $50 a month. Using quasi-difference-in-difference and fixed effects methodologies and an intention-to-treat (ITT) design with two different data sets, we find that this policy change reduced use of the Pill by at least 1 to 1.8 percentage points, or 2 to 4 percent, among college women, on average. For college women who lacked health insurance or carried large credit card balances, the decline was two to three times as large. Women who lack insurance and have sex infrequently appear to substitute toward emergency contraception; uninsured women who are frequent sex participants appear to substitute toward non-prescription forms of birth control. Additionally, we find small but significant decreases in frequency of intercourse and the number of sex partners, suggesting that some women may be substituting away from sexual behavior in general.
Country of focus: United States of America.