Mar 9
Important note
Reading the text below the video is part of your reading assignment. I recommend watching the video, reading this, and then watching the video again.
“Women Working: What’s the Pill Got to Do With It?” from mru.org:
The pill had little to do with it
The video says, “Research... shows that the major factor explaining these dramatic increases was the invention and legalization of the pill” (oral contraception). This claim is false.
At the time the video was made, the best available evidence supported the claim, but recent research by Caitlin Myers and Randy Cragun (I know him!) provides strong evidence that changes in fertility and marriage timing attributed to the pill were mostly due to changes in abortion access and that Bailey found apparent effects on earnings and labor force participation because of statistical errors.
So why watch the video?
Two reasons:
- To illustrate the scientific method
- To illustrate real-world application of economics to make predictions
Science should not be dogmatic
This is exactly how science should work. We use theory (like MB and MC) to make predictions (“hypotheses”) about what we should observe in the world. Then we test those hypotheses with data (observations). We test them over and over in different ways. If the predictions are consistently correct, we slowly accept that the theory is correct.
But there is always some chance that new evidence will overturn what we thought we knew. The stronger the existing evidence is, the less likely it is that the theory will be overturned. There will almost certainly not be research published tomorrow that makes us decide that gravity is a bad theory. But the evidence from Goldin, Katz, and Bailey was much weaker, so it did not take much to change concensus among demographers.
Using theory to make predictions
In this class, we have used marginal cost and marginal benefit to explain and predict choices. We have not tested those predictions because we do not have enough time to cover the technical skills needed to do so. Instead, the purpose of this class is to teach you to think like an economist. Goldin and Katz were thinking like economists when they predicted that pill access would cause women to marry at later ages. They were wrong, but we only know that because they developed a theoretical framework for economic thinking about the issue that inspired decades of research.
In fact, Goldin and Katz were probably only partially wrong because their theoretical model was missing important pieces. For example, they theorized that pill access decreased the cost of investments in school by allowing women to avoid getting pregnant while in school without having to give up sex. This is probably true; it is just not the entire story. After the pill was widely available, people in school could increase their sexual activity but achieve the same risk of pregnancy. This is analogous to moving a budget constraint outward—there are more options to choose between. Goldin and Katz predicted a particular response to this increased “possibility set”, but there are many ways someone could respond.
Imagine a budget constraint with two goods. If your income increases, the budget constraint moves outward. Does that mean that you consume more of both goods? Not always. Imagine a college student who eats instant ramen twice per week. After they graduate and get a job that pays $100,000/year, they could consume a lot more ramen. Will they? Probably not.
Similarly, better contraception allows people to achieve higher consumption of both schooling and sex. If someone started using the pill without changing their sexual activity, then they would be less likely (than without the pill) to have a child, which would lower the cost of school. Does that mean that people respond to pill access by delaying fertility and getting more schooling? Maybe. Maybe not. They could also respond by having a lot more sex. And they did. Myers shows that young people who started using the pill also started having more sex, which made them more likely to have a child. This increased the cost of school. My work shows that similar legal changes in Australia led to young women being more likely to share a home with a romantic partner.
What to take away from the video
The video should help you understand and appreciate how economists use economic ideas to make hypotheses. It should inspire you to apply these ideas in your life in areas that do not seem at first like economics.
The video should also make you humble about your beliefs. When I first started doing research in this field (economics of demographics and family planning), I was awed by Claudia Goldin and Martha Bailey (and I still am). I spent years building on their research. I was convinced that they were right, and my research strengthened their claims. I was even invited to the US Census to present my research that used their same flawed methods to show big effects of legal changes on pill use. I distributed that research to hundreds of universities when applying for jobs. But I was wrong, too.