Journal Issue: Fragile Families Volume 20 Number 2 Fall 2010
We next present summary findings from a set of benefit-cost simulations of three programs, one to motivate individuals to avoid unintended pregnancies, one to improve their knowledge about contraception, and one to remove barriers to contraceptive access. Specifically, we present findings from simulations of a mass media campaign that encourages men to use condoms, an effective teen pregnancy prevention program that discourages sexual activity and educates participants about proper contraceptive use, and an expansion in access to Medicaid-subsidized contraception. Our simulations draw on the information contained in this article and in a longer paper.60
We conduct these analyses using FamilyScape, a sophisticated simulation tool developed at the Brookings Institution to simulate the effect of policy changes on family formation. FamilyScape simulates the key antecedents of pregnancy (for example, sexual activity, contraceptive use, and female fecundity) and many of its most important outcomes (for example, childbearing within and outside of marriage and among teenaged and non-teenaged mothers, children's chances of being born into poverty, and abortion).61 Behaviors and outcomes of interest are simulated at the individual level and are allowed to vary according to certain demographic characteristics. With few adjustments to these individually specified behaviors, FamilyScape tracks real-world outcomes relatively well. That is, it can generally replicate such aggregate outcomes as pregnancy or birth rates based on a set of empirically derived assumptions about how often people have sex, do or do not use contraception of a particular type, do or do not have an abortion, do or do not marry, and so forth.
For the simulated expansion of Medicaid-subsidized family planning services, we assume that contraceptive use would increase by about 2.5 percentage points in all states that have not yet been granted an income waiver.62 We also assume that this increase would be concentrated among low-income women, most of whom are unmarried. We assume that the simulated mass media campaign would be ongoing, that its target population would be unmarried men between the ages of fifteen and forty-four, and that 3 percent of that group would switch from using no contraception to using condoms as a result of the campaign.63 For the simulated teen pregnancy prevention program, we assume that a well-designed and effective campaign that is taken to scale nationally would have about half of the impact of the small-scale campaigns whose effects are summarized in table 2. (Previous research suggests that maintaining the effectiveness of high-quality programs is difficult when they are replicated in new settings.) Because most findings described in table 2 are for low-income adolescents, we also make the simplifying assumption that the program would be targeted on teens of low socioeconomic status.64
Table 3 shows the findings of our policy simulations. It is important, when examining these findings, to bear in mind that a program might appear to be relatively more or less efficacious depending simply on the target group chosen. For example, the teen pregnancy prevention program has a smaller effect (0.8 percent) on the overall pregnancy rate than on the rate of teenage pregnancy (7.5 percent).
The bottom panel of the table shows the results of our benefit-cost analysis.65 We estimate these programs' costs using data described in endnote 66, and we estimate their benefits by measuring the taxpayer savings associated with the pregnancies that they would prevent. We measure these savings by focusing specifically on the costs to taxpayers of providing publicly subsidized medical care for pregnant women, publicly subsidized medical care for infants, and means-tested government benefits for young children.66 We chose this definition of cost savings because it is measurable using available data and is broadly consistent with the approaches taken by other researchers who have conducted related exercises.
All three policies have benefit-cost ratios that are comfortably greater than one. Some policies, however, are more cost-effective than others. For example, even though the Medicaid expansion is by far the most expensive of the three policies, its benefit-cost ratio is also the largest. This finding partially reflects the Medicaid expansion's focus on lower-income women who are likely to qualify for the government benefits and services on which our cost-savings estimates are based. It also reflects the efficient targeting of the Medicaid expansion: when money is spent on improving access to Medicaid-funded contraceptive services, a relatively large share of that money provides contraception to women who are likely to use it. By contrast, our simulated sex education program serves large swaths of teens whose behaviors remain unchanged by the intervention. Similarly, although the media campaign reaches many people relatively cheaply—we estimate its annual cost per member of the target population to be about $2.70—it changes the behavior of only a small share of these individuals. Thus, the campaign's benefit-cost ratio is higher than that of the teen pregnancy program but lower than that of the Medicaid expansion.
Many of these conclusions are relatively insensitive to large changes in the assumptions underlying the analysis. For example, even if these programs were half as effective —or twice as expensive—as we assume them to be, all three would have benefit-cost ratios greater than one. Moreover, even if the cost of the Medicaid expansion were twice what we assume—or if the benefits of teen pregnancy prevention programs were twice as large as is implied by our analysis—the former program would still be modestly more cost-effective than the latter. As we show in a separate paper, however, none of these policies is estimated to be cost-effective if one's measure of taxpayer savings excludes the public cost of benefits provided to children after they are born. We would argue, though, that these savings should be included. Indeed, if we were to extend even further the window of time over which we measure the public cost of providing children's benefits and services, our estimates would show that these policies are still more cost-effective.
Our bottom-line assessment is that all three programs are sound investments worthy of consideration by policy makers. We further conclude that, for policy makers most interested in reducing teen pregnancy, a well-designed curricular program focusing specifically on teens would be the most sensible option to pursue. For policy makers intent instead on implementing a program that is cost-effective but comparatively inexpensive, a media campaign might make the most sense. And for those interested in preventing unintended pregnancy and childbearing more generally, expanding Medicaid-subsidized family planning services might be most appropriate option. More to the point, these findings suggest that expanding contraceptive access is likely to be more cost-effective than many of the competing alternatives that have the same basic objective.