Abortion, Income, Wantedness: Evidence from the American Community Survey

This paper serves two purposes: (1) to find the effect of the legalization of abortion on future wages and (2) to test Donohue-Levitt\u27s \u27Wantedness Hypothesis\u27 (i.e., that relatively more wanted children have superior economic outcomes). Non-parametric evidence suggests that the legalization of abortion increased the annual salary and wage and salary income for people born before 1973 in a state with legal abortion. The OLS specifications suggest that once state surveyed and state of birth effects are included into the models the effect is negative. Once macroeconomic and other unobservable effects are controlled for, I find no evidence of an effect for non-Whites. Moreover, I find evidence contrary to the Wantedness Hypothesis for Whites, suggesting that Whites born in a state with illegal abortion prior to Roe v. Wade had lower wages after the policy change and were affected negatively by the access to abortion