Subsidized Contraception, Fertility, and Sexual Behavior

We examine the impact of recent state-level Medicaid policy changes that expanded eligibility for family planning services to higher-income women and to Medicaid clients whose benefits would expire otherwise. We show that the income-based policy change reduced overall births to non-teens by about 2% and to teens by over 4%; estimates suggest a decline of 9% among newly eligible women. The reduction in fertility appears to have been accomplished via greater use of contraception. Our calculations indicate that allowing higher-income women to receive federally funded family planning cost on the order of $6,800 for each averted birth.