State abortion restrictions hurt female entrepreneurs

March 9, 2021

Abortion access is tied to business opportunity for women. (AP Photo/Juan Carlos Llorca)

Abortion access may help women start their own businesses, according to new research analyzing U.S. Census Bureau data.

A study of millions of Americans reveals that even going from 11 abortion-providing clinics to 10 clinics for every million residents in a state was linked to a 6.71% drop in the probability that a woman would start her own business. In contrast, access to reproductive care apparently had no effect on men's rates of entrepreneurship.

Jonathan Zandberg, a Ph.D. candidate at Boston College, found in one large dataset that 1.51% of college-educated women between the ages of 20 and 40 had incorporated their own businesses, compared with 3.37% of men. Zandberg told The Academic Times that addressing the gender gap in entrepreneurship is important for economic growth, and a major factor holding women back is that women are uniquely burdened with family planning choices. 

"With men, you won't find it such a big issue," he said. "I look at this trade-off between family formation choices and entrepreneurial aspiration."

For his research, published Feb. 27 in the Journal of Financial Economics, Zandberg analyzed data on 3.3 million people captured by the Census Bureau's American Community Survey, as well as data on 393,316 people in the Annual Social Economic Supplement. State by state, he compared rates of female entrepreneurship with the number of abortions per total pregnancies, excluding miscarriages and fetal deaths. 

He also measured rates of female entrepreneurship before and after Roe v. Wade — the 1973 Supreme Court decision that overturned state abortion bans as an invasion of women's constitutional right to privacy — and before and after the enactment of state laws restricting abortion access. Between 1968 and 1989, women in 45 states became 1.69 percentage points more likely to become entrepreneurs. The five states that allowed abortion in 1970, before the "exogenous shock" of Roe, already had higher rates of entrepreneurship; post-Roe, the other states caught up.

Likewise, between 1977 and 2008, Zandberg found that rates of female entrepreneurship dropped after the passage of a law making it more difficult to get an abortion.

The results showed a clear link: Greater access to abortion was strongly correlated with higher rates of women owning their own businesses. Abortion rates were important for middle-income women specifically, which Zandberg attributed to two things: Higher-income women could more easily travel to seek out an abortion if they needed one; and lower-income women were "entrepreneurs of necessity," who are more or less obligated to run a business regardless of their family planning choices.

The results also showed that a higher abortion ratio in a state was correlated with higher numbers of women owning a business that employed 10 or more people. Zandberg said that part of the analysis showed that abortion access was not just allowing women to found companies; it also seemed to allow women to build their companies and thrive.

Zandberg noted in his study that Black women have the highest rates of abortion and that the ranks of Black female entrepreneurs are growing much faster than female entrepreneurs overall. Future research could examine a link between Black women's reproductive health care access and entrepreneurship specifically, he said.

Before embarking on this research project, Zandberg conducted 15 brief interviews with female business owners, asking them general questions about their companies, the primary obstacles they faced and whether they had children. Two of the entrepreneurs independently brought up their own abortions. 

"One was very young and single when she had her abortion, and the other was a little bit older, with already two kids," Zandberg said. "But both cited their business as the main reason for having it. Both said, 'Now the business is my baby. I want to focus on this business, and that's why I decided not to have a baby.'" 

Zandberg insisted he was not advocating for abortion per se, but rather saying that it was good for women — and for the economy — to have the option to terminate an unwanted pregnancy. If women are inhibited from running businesses because they can't get abortions, then men are given an advantage, and, as he wrote, "Capital may flow to lower quality entrepreneurial ventures."

The study, "Family Comes First: Reproductive Health and the Gender Gap in Entrepreneurship," published Feb. 27 in the Journal of Financial Economics, was authored by Jonathan Zandberg, Boston College. 

This article has been updated to include additional data.

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