Jan. 9, 1997
Vol. 16, No. 8

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    Hotz: Teen motherhood has little impact on welfare costs

    Programs aimed at reducing the rates of teen pregnancy have little effect on cutting welfare costs, according to a new report by V. Joseph Hotz, Professor in the Irving B. Harris Graduate School of Public Policy Studies.

    Teen mothers who receive welfare are part of a disadvantaged group that is likely to receive welfare at some point in their life whether they have children before age 18 or later, Hotz's research shows. Furthermore, by their late 20s and early 30s, these mothers actually earn more than if they had delayed having children, because their children are older and the mothers are able to work more hours.

    "Over her early adult life (from age 17 to 34), a teen mother is no more likely to participate in government-sponsored public assistance programs than if she had delayed her childbearing until she was an adult," said Hotz, who headed a research team that included Seth Sanders and Susan Williams, professors at the Heinz Graduate School of Public Policy and Management at Carnegie Mellon University.

    In their paper, "The Costs and Consequences of Teenage Childbearing," published in the current issue of the journal Chicago Policy Review, Hotz and his co-authors contend that politicians and others have wrongly compared teen mothers to all women in society when making their judgments against early motherhood. Women who become mothers before age 18 usually come from socially and economically disadvantaged backgrounds and accordingly have different career paths from those of many other women. Teen mothers are more likely to be from minority families, low-income families, female-headed households and homes where parents have less than a high school education, the researchers found.

    To fairly assess the impact of teen motherhood on welfare costs, the lives of women who become teen mothers should be compared with those of women from similar backgrounds who delay childbirth. To make such a comparison, Hotz and his colleagues contrasted the experiences of women who were mothers before age 18 with those of women who became pregnant before 18, miscarried and became mothers later in life.

    The data used was drawn from the National Longitudinal Survey of Youth, collected by the National Opinion Research Center at Chicago. NLSY, the nation's largest long-term study of young people, has been following men and women who were 14 to 21 years old in 1979. Members of the group, which includes nearly 5,000 women, have been interviewed every year since the survey began.

    By age 34, women who had been teen mothers were earning about $25,000 a year, nearly $5,000 a year more than if these women had delayed childbearing until they were young adults.

    "We found that teen mothers would earn less over their lifetimes if they were forced to delay their first births," Hotz said. "This loss in earnings translates to a reduction in taxes paid by these women and an increase, rather than decrease, in the net costs to government associated with the postponement of motherhood."

    Although teen mothers have lower rates of high school graduation than do women who delay child birth, they apparently make up for this deficit by obtaining general equivalency diplomas. While 62 percent of the women surveyed who delayed childbirth had a GED or a high school diploma, 64 percent of the women who were teen mothers had a similar level of education.

    The women in both groups chose jobs where on-the-job experience mattered more than educational credentials, the researchers found. "For such women, concentrating their childbearing at early ages may prove to be more compatible with their likely labor market career options than would postponing motherhood," Hotz said.

    Although many teen mothers, as well as those from similar backgrounds who delay motherhood, receive welfare benefits at some time during their early adulthood, the amount of AFDC and food-stamp aid received by teen mothers declines as the women move through their 20s. Eventually, it becomes less than that received by the women who delayed childbirth.

    "Taxpayers would save virtually nothing if all these women had delayed their first birth by 2 to 2.5 years. In fact, we estimate that the total annual expenditures on public assistance would increase slightly, rising by $800 million if all of these women had delayed their childbearing."

    The net cost of teen pregnancy (welfare expenditures minus the taxes the women incur on their incomes) is currently $2.1 billion, while it could be as much as $4 billion if the women delayed their births, because they would not be in the labor market as long, Hotz said.

    Hotz's article does not measure quality of life or long-term outcomes for children of teen mothers. "These rather startling findings call into question the view that teen-age childbearing is one of the nation's most serious problems, at least in terms of the costs to taxpayers," he said.

    -- William Harms