Working Paper: NBER ID: w23911
Authors: Toms Rau; Miguel Sarzosa; Sergio S. Urzua
Abstract: We use sharp, massive and unexpected price increases of oral contraceptives—product of a documented case of collusion among pharmaceutical retailers in Chile—as a natural experiment to estimate the impact of access to the Pill on fertility and newborn health. Our empirical strategy combines multiple sources of information and takes into account the seasonality of conceptions and the general trends of fertility, as well as the dynamics that arise after interrupting Pill's intake. Our estimates suggest that due to the price hike, the weekly birth rate increased by 4%. We show large effects on the number of children born to unmarried mothers, from mothers in their early 20's, and to primiparae women. Moreover, we find evidence of significant deterioration of newborn health as measured by the incidence of low birthweight and infant mortality. We suggest that the “extra” conceptions faced dire conditions during gestation as a result of mothers' unhealthy behaviors. In addition, we document a disproportional increase of 27% in the weekly miscarriage and stillbirth rates, which we interpret as manifestations of active efforts of termination in a country where abortion was illegal. As the “extra” children reached school age, we find lower school enrollment rates and higher participation in programs for students with special needs. Our results suggest that access to contraceptives may prevent conceptions that will turn out to be in relatively poor health, and thereby may improve the average health of children conceived.
Keywords: contraceptives; fertility; newborn health; Chile; natural experiment
JEL Codes: I14; I15; K42; L13; L4; L41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| unexpected price hike of contraceptives (P22) | increase in weekly birth rate (J13) |
| unexpected price hike of contraceptives (P22) | increase in low birth weight (J19) |
| unexpected price hike of contraceptives (P22) | increase in infant mortality rates (J13) |
| unexpected price hike of contraceptives (P22) | increase in miscarriage and stillbirth rates (J13) |
| increase in weekly birth rate (J13) | unintended pregnancies (J13) |
| unintended pregnancies (J13) | lower enrollment rates in school (I21) |
| unintended pregnancies (J13) | higher participation in special education programs (I24) |