The Impact of Subsidized Birth Control for College Women: Evidence from the Deficit Reduction Act

This paper uses a unique natural experiment to investigate the sensitivity of American college women’s contraceptive choice and sexual behavior to the price of prescription birth control. In 2005, Congress unexpectedly increased the effective price of birth control pills (“the Pill”) at college health centers more than three-fold, from $5 to $10 a month to between $30 to $50 a month. Using two different data sets, we employ multiple empirical strategies—including interrupted time-series, quasi-difference-in-differences, and fixed effects—for identification, and we find consistent results across data sets and methodologies. Our benchmark estimates show that this policy change reduced use of the Pill by at least 1.5 percentage points, or 3 to 4 percent, among all college women. For college women who lacked health insurance or carried large credit card balances, the decline was two to three times as large. We also find modest but significant decreases in frequency of intercourse and the number of sex partners, suggesting that some women may be substituting away from sexual behavior in general. Finally, supplementing our data with a unique survey on how and where birth control prescriptions are filled, we use a back-of-the-envelope calculation to bound the price elasticity of Pill usage between -0.09 and -0.04.