Dollars and Sex

by Marina Adshade

  Teen sexual behavior, and outcomes, is also very much a race issue in the United States. White sexually active teenage women were more likely to have used the pill the last time they had sex than were black and Hispanic teenagers: 39 percent of white teenage women were on the pill, compared with 14 percent of black teenage women and 17 percent of Hispanic teenage women.

  Black and Hispanic teenage women are more than twice as likely to give birth as white teenage women: 2.4 percent of white teenage women aged 15 to 19 gave birth in 2010, compared with 5.2 percent of black teenage women and 5.6 percent of Hispanic teenage women.

  Not only are black and Hispanic teenage women more likely to become pregnant, but they are more likely to have several children before they turn 20. For example, black and Hispanic girls, combined, make up about 34 percent of the whole population of teenage women but 58 percent of the teenage women who had their first baby in 2009. We already knew they were overrepresented in that group having a teen pregnancy, but it is worth noting that they made up 66 percent of teenage moms having their second child that year, 73 percent of teenage moms having their third, and 80 percent of teenage moms having four or more children.

  Astonishingly, 1,316 women in the United States between the ages of 15 and 19 gave birth to their fourth child or higher in 2009.

  Part of the explanation for why birth rates vary between the races is due to differing attitudes toward teen pregnancy. For example, in response to the question: “If you got pregnant now, how would you feel?” only 8 percent of white teenage women said they would be either a little or very pleased, compared with 19 percent of Hispanic teenage women and 20 percent of black teenage women.

  Finally, young women are the most likely group to contract a sexually transmitted disease; the Centers for Disease Control estimate that youths between the ages of 15 and 24 represent only 25 percent of the sexually experienced population, and yet nearly half of all new sexually transmitted diseases are acquired by people in that age group. They are four times more likely to have either chlamydia or gonorrhea and twice as likely to have syphilis than the general population.

  Again, black teenage women are overrepresented in the group of women who are infected with a sexually transmitted disease. In 2009, they were sixteen times more likely to have contracted chlamydia, seven times more likely to have contracted gonorrhea, and twenty-eight times more likely to have contracted syphilis than white teenage women.

  This empirical evidence suggests that while teen sexuality and pregnancy are on the decline, infections with sexually transmitted diseases among teens are not. That seems counterintuitive, but there is an economic explanation as to why that is the case.

  And while teen sexuality is changing in positive ways within some socioeconomic groups, there are others in which teenagers are paying a high cost for being sexually active. That suggests that teen sexuality is better understood when we recognize that teenagers are responding to the changing economic environment in which we all live.

  INEQUALITY CREATES A CULTURE OF DESPAIR

  One of the things you might have noticed about Sarah’s school is that it was attended by youth who came from different socioeconomic backgrounds. In fact, the school drew its students predominantly from two very distinct neighborhoods: a neighborhood where the residents are affluent and well educated and a neighborhood where the residents live in public housing and many live on social assistance: “the pubs.”

  The second thing you might have noticed was that the teen pregnancy rate was very high. With maybe two hundred students in her graduating class, there should have been no more than eight girls giving birth, and yet judging by how many came to see their friends enter the prom, the rate at that school was actually much higher.

  A paper by economists Melissa Schettini Kearney and Phillip Levine provides some interesting evidence as to why the teen pregnancy rate at Sarah’s school was so high; they would argue that the diversity of economic backgrounds of the students in the school has played an important role.

  One of the interesting features of the United States is that we observe big differences in teen pregnancy rates from one state to the next. These researches take advantage of that state-by-state variation to see what role income inequality has played in promoting teen pregnancy rates. They argue that a “culture of despair” has developed among the less-advantaged residents in states that have very high levels of income inequality. This culture reduces the perceived cost to teenagers of having a baby during high school, since those girls giving birth assume, probably correctly, they will never be able to rise above their current circumstance regardless of whether or not they become a teenage mother.

  When we think of culture, we often think that because it is external to us as individuals, that it is somehow external to the world around us as well; it is something we inherit like brown eyes or ugly feet. Economists think of culture as being endogenous—determined internally within a given society by the economic environment of that society. Yes, we inherit our culture, but that is in part because we inherit the economic environment. If that economic environment changes, then the culture of that society will change as well.

  CONDOM AVAILABILITY IN SCHOOLS INCREASES TEEN PREGNANCY

  There is a psychological barrier that is crossed the first time a person has sex that, in an economic sense, is akin to paying a fixed cost: a cost that once incurred does not have to be paid again. Adolescents may choose not to have sex initially in order to avoid paying this fixed cost, but once they have lost their virginity, it is more likely that they will have sex again since the fixed cost has already been paid.

  If schools make condoms available to teens, and that availability lowers the expected cost of virginity loss, then the availability of condoms could increase promiscuity in teens in both the short run and in the long run. Teens will respond by having sex earlier (the short run) and then continue to have sex in the future (the long run). In the short run, condom use may be high and teen pregnancy low, but the long-run pregnancy rates among teens could increase, since condoms are often used incorrectly.

  A policy simulation conducted by economists Peter Arcidiacono, Ahmed Khwaja, and Lijing Ouyang suggests that restricting availability of condoms to 14-year-old students would increase the rate of unprotected sex by 8 percent in the year the policy comes into effect and by 4 percent three years later. But while more students are having unprotected sex, other students will choose not to have sex at all; the rate of sexually active teens falls 3 percent in the year the policy is introduced and by 5 percent three years later.

  Despite the increase in unprotected sex, as a result of the reduction in sexual activity, pregnancy rates in the simulation dropped in all three years, suggesting that restricting teen access to contraceptives is a good policy for reducing pregnancy.

  The problem with this conclusion is that the teens in this policy simulation are extremely young (14) and are bound to be the most responsive to small changes in availability of condoms. For example, they would probably have a much harder time walking into a store and buying condoms than would an older teen. So, while this policy simulation may say something about their behavior, it probably has less to say about how older teens will respond to the lack of availability of condoms. It also ignores the possibility that early access to condoms will increase both the willingness to use them, and improved skills at doing so, later on in a teen’s life.

  So, inequality creates a culture among poorer families that their economic condition is inevitable and unchangeable.

  The empirical evidence finds that teenage women from low socioeconomic homes who live in low-income-inequality states are less likely, by 5 percentage points, to give birth by age 20 than are similar women living in high-income-inequality states.

  It also suggest that those same women are more likely, by 4 percentage points, to terminate a pregnancy when they live in low-income-inequality states compared with when they live in a high-income-inequality state.

  So, the
big difference in teen birth rates between low- and highincome-inequality states is not that teenage women are significantly less likely to become pregnant but rather that they are more likely to have an abortion once they have become pregnant.

  Troy’s aunt’s reaction when he was asked about taking the necessary classes for entrance to college is a good example of how culture plays a role in teenage sexual behavior. Troy’s family has been economically marginalized for several generations, while over the same period the affluent families in their community have come to hold the majority of wealth. His family’s inability to change their fortunes in the past created a culture of despair within the family.

  Troy’s family believed that he would never rise above their current standard of living and, as a result, never expected him or his cousin to finish high school. While ultimately it was economic hardship that prevented Troy from finishing high school, the fact that no one ever told him that he was capable of furthering his education played a role in that decision. Troy’s cousin, on the other hand, finished high school but went no further; instead, he found work to support his girlfriend and their baby. Their choices may not have guaranteed that they stay within their low socioeconomic class, but they did make it significantly more difficult to improve their living standard than it would have been had they not had a baby in high school.

  POSTSECONDARY EDUCATION IS A PRIVILEGE

  The reality for many students is that they don’t need a culture of despair to discourage them from believing that they will go to college. If college were affordable for everyone, then even teens from underprivileged families could dream of one day having a high-paying job that requires a college degree. As education is costly, however, the reality faced by many students is that they will never be able to afford to go to college. If this is the case, then having a baby in high school does not limit their options in terms of furthering their education—because more education never was a viable option.

  That suggests that there might be a relationship between teen pregnancy and the price of a college education.

  A recent paper by economist Benjamin Cowan uses nationally representative U.S. data to determine if teens in states with lower tuition and fees for public community colleges make better sexual choices in response to increased optimism about future education. He finds that a $1,000 reduction in price of a community college education decreases the number of sexual partners the average 17-year-old high school student has by a remarkable 26 percent.

  He also finds that students are less likely to engage in other risky behaviors, such as smoking (down by 14 percent) and marijuana use (down by 23 percent), when college is affordable.

  Of course, this argument assumes that teenagers are rational, forward-looking individuals who understand that risky sexual behavior today has the potential to impose costs on them in the future. The idea that teens are rational when it comes to sexual decision making may be a tough sell, but this paper finds that for students in their final year of high school, an increase in college tuition by $1,000 reduces a student’s expectations of continuing in school by 5.7 percent, implying that teens do take the cost of education into consideration when setting their expectations about their future.

  He also finds that far fewer students continue their education after high school than those who think they will: 83 percent of high school seniors believe they will be enrolled in school in one year’s time while only 56 percent actually find themselves in a university or community college. Those, perhaps false, expectations explain why we observe such a big change in teen sexual behavior despite the evidence that not all students continue in school—they don’t need to continue; they just need to believe that it is possible.

  I said earlier that the teen pregnancy rate in the United States is the highest in the developed world and more than double that of its closest neighbor (thirty-nine births per thousand teenage woman in the United States, compared with fourteen births per thousand teenage women in Canada). This disparity in teen pregnancy rates is even greater when we compare the United States to European nations that provide very inexpensive postsecondary training. The teen pregnancy rate in the United States is three times higher than in Germany and France and four times higher than in the Netherlands. The most obvious, economic, explanation for the differences in teen pregnancy rates between the United States and other developed nations is that teenagers from low-income families in the United States have more reason to be pessimistic about their postsecondary educational opportunities than do similar teenagers in other countries.

  LESS SEX IS MORE SEXUALLY TRANSMITTED DISEASES

  Promiscuity in U.S. high schools, as I have already said, is at a twenty-year low and teen birth rates have fallen by over one-third from 1991 to 2009. How can it be that teens are sexually active at lower frequencies, and appear to be taking more precautions, and yet 50 percent of new STD infections last year were in people younger than 24?

  To understand the answer to this question, imagine a school where there are one hundred students, of which fifty are sexually active with other students in the school. It doesn’t matter what their gender is, nor does it matter if they are heterosexual or not; what matters is that they are not in monogamous pairs: they are teenagers after all and so each one can have several sexual partners over the course of a year.

  At the beginning of the year, one student arrives infected with an STD. Given that students are not in committed relationships, that student infects his/her partner, who then infects his/her next partner, and so on. By the end of the year, a certain percentage of students in the school are infected—presumably less than half since only 50 percent are sexually active.

  Now imagine that the following year, another hundred students arrive at the school, but now only forty students are sexually active. Again, at the beginning of the year, one student arrives with an infection and the whole process starts all over again. Now given that there are fewer sexually active students, we might be tempted to predict that fewer students are infected by the end of the year. But, that prediction would probably be wrong.

  Not all students behave in the same way when they are sexually active, and chances are that the students who have chosen to not have sex in this year are the students who, had they been sexually active, would have taken the greatest precautions to prevent infection; they are the students who are the most risk averse.

  For example, consider the behavior of the following three people. The first person is very risk averse and always insists on proper condom usage. The second person is risk neutral and neither insists nor refuses condom usage. The third person is risk loving and always insists on sex without a condom.

  In the past, when more teens were sexually active, the risk-averse person might have ended up in a sexual relationship with the risk-neutral person. If that was the case, then both would be protected from sexually transmitted disease (the risk-averse person would insist on condom usage and the risk-neutral person would comply with that request).

  When the costs of sex increased, for example, because college education became more important to future income, teens like the risk-averse person stopped having sex altogether. Now a greater proportion of those having sex on the high school market are just like the second (risk-neutral) and third (risk-loving) people.

  The risk-neutral person, who might have been protected in the past from infection by a diligent risk-averse partner, is now having sex with a risk-loving partner. The risk-loving partner insists that no condom is used and the risk-neutral person complies with that request, so both are at a much greater risk of infection.

  When the most risk-averse students are removed from the teen sex market, then not only will the infection rate not decrease, but it could very well increase. This is because sexually active teens who might have otherwise found themselves with cautious sex partners are left with partners who are more risk neutral—or even risk loving—when it comes to safe sex.

  Economists call this a change on the extensive m
argin—otherwise safe sexual partners have left the market leaving the remaining sexually active teens at greater risk of infection. There is a second change that can explain the rising rates of STDs and that is a change on the intensive margin—those people still on the teen sex market have changed their behavior in a way that has increased risk.

  A recent paper by economists Peter Arcidiacono, Andrew Beauchamp, and Marjorie McElroy finds that in schools in which teenage women outnumber teenage men, the gender imbalance increases the willingness of women to participate in relationships that involve sex. (This is very similar to the story told earlier that said that in college, girls are more sexually active than they want to be when male college students hold all the “market power.”)

  They find, for example, that when grade-twelve men outnumber grade-twelve women, the fraction of grade-twelve girls who are in a relationship and having sex is much higher than the fraction who stated that they want to be in a relationship that involves sexual intercourse. They also find that the fraction of grade-twelve boys who are in a relationship and having sex is very similar to the fraction that stated that this is their preference; they want to be in a relationship that involved sexual intercourse.

  This says that, in grade twelve, boys have greater bargaining power over sexual activity because they are having as much sex as they want, and the girls have less bargaining power over sexual activity because they are having more sex than they want.