Risking the Future Adolescent Sexuality, Pregnancy, and Childbearing, Volume II: Working Papers and Statistical Appendices (1987) / Chapter Skim
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10 Estimates of Public Costs for Teenage Childbearing: A Review of Recent Studies and Estimates of 1985 Public Costs
10 Estimates of Public Costs for Teenage Childbearing: A Review of Recent Studies and Estimates of 1985 Public Costs
Pages 264-294
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From page 264... ...
Some studies calculate the public cost over a 20 year period of the family begun by a single teen birth, and the total cost for the same 20 year period of the cohort of families begun by a teen birth in a single year. They ask, for example, what will the family of a woman who has her first baby as a teenager in 1985 cost the public by the time her first baby reaches adulthood?
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From page 265... ...
Other studies estimate the total public outlay in a given year that is attributable to teenage childbearing, including expenses for families in which the first birth occurred when the mother was a teenager, even though she may now be considerably older. Since approximately half of the AFDC caseload at any time consists of families begun by a teen birth, but only 4 percent of these families are headed by women who are currently teenagers, this figure -- total public cost for a single year -- is very large.
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From page 266... ...
Single Birth Cost: $18,710 Single Cohort Cost: at least $8.3 billion This report serves as the model for many of the local studies described below. SRI used a variety of published statistics to develop its estimates of cost and welfare and service utilization.
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From page 267... ...
Welfare costs included AFDC, food stamps and other food programs, social services, and public housing expenditures. Further, SRI discounted further costs.
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From page 268... ...
For our purposes, the important and widely cited part of this study is its estimate of AFDC, Medicaid and food stamp expenditures in the single year of 1975 that went to families begun be a teen birth (regardless of the mother's current age)
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From page 269... ...
Single Birth Cost: $13,852 Single Cohort Cost: $11,746,283 This report is very brief and to the point, presenting a Balance sheet" on the public cost of first births to teens in 1979, projected for 20 years. The report follows the methodology developed by SRI International for projecting these costs, including discounting, using only first births in the base year, treating teenagers 14 and younger, 15-17 and 18-19 as separate categories, and using first births to all teenagers (not just out-of-wedlock births)
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From page 270... ...
and assuming that second and higher order birth costs are part of the consequence of a first birth that occurred in an earlier year. If, as the report states, the authors followed the SRI methodology, then the Single Cohort Cost should represent the cost of first births, with all their consequences over the next 20 years including subsequent births while the mother is still a teenager.
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From page 271... ...
The full cost figure will obviously be larger than the marginal cost figure; but it would mislead policy makers to infer that the public would save the full cost if teenagers delayed childbearing Rather, they would save the marginal cost. Wertheimer and Moore (1982)
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From page 272... ...
These costs include APDC payments, Medicaid, single issue, emergency and vendor payments, and estimated food stamp costs. 1977 costs for families begun by a teen birth totaled 826.3 million, while no-teenbirth families absorbed $17.5 million in public outlays.
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From page 273... ...
This report contains many other elaborate analyses comparing the costs incurred for families begun by a teen birth and families for whom childbearing was delayed beyond the teen years. They are potentially interesting to the specialist, but probably not to the lay reader who wants just the basic cost information.
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From page 274... ...
Inclusion of elements of both n single year cost" methodologies and "single birth cost" and "single cohort cost" methodologies in the same study (which makes comparing cost figures from this study with those of any other study very difficult)
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From page 275... ...
Probability of occurrence among teenage births for low birth weight and very low birth weight infants, for many later conditions associated with low birth weight babies, and for significant illnesses and injuries are summarized, based on data from many different research reports. It also estimates the proportion of child protective services cases that involve children born to teenagers, and the utilization of in-home supportive services and foster care for these children; utilization of WIC, job training and special services for teen mothers; and participation in family life education and family planning services.
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From page 276... ...
Which Babies? The issue here is, should the base consist only of first births when calculating single birth cost and single cohort cost (counting subsequent births as additional costs associated with a "career" begun by the first birth)
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From page 277... ...
Clearly there is no one-to-one relationship between teenage childbearing and public cost, both because, as in reality, teen births in these simulations are mostly delayed, not eliminated, and because factors associated with poverty still characterize many teenagers even when the computer simulation artificially prevents them from having births. These factors eventually affect same proportion of teenagers in the model, leading to public dependency.
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From page 278... ...
Which Public Costs? The issue here is, which of the many possible public programs used by households begun by a teen birth are the most important ones to include in cost estimates?
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From page 279... ...
74~. However, the data necessary to include foster care costs as part of single birth or single cohort costs does not exist, because we do not have enough evidence of the probability that a given teen mother will have a child removed from her custody.
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From page 280... ...
. O When calculating single birth or single cohort cost discount, future year costs; Calculate both full and marginal cost; Use a 20-year projection for single birth and single cohort cost; AFDC, food stamp and Medicaid costs are the "big three" to include in all estimates.
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From page 281... ...
The rest of Part II presents two types of estimates: single year per public cost estimates and single birth/ single cohort public cost estimates. Each presentation has three sections: (1)
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From page 282... ...
It should be noted that the figure of $16.65 billion is conservative, since it includes only the sums expended in the three major programs. Not included in this figure are other services more likely to be used by families begun by a teen birth than by other families, such as publicly supported social services, housing, special educational services, and child protective services and foster care.
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From page 283... ...
SINGLE BI RTH AND SINGLE COHORT COST ESTIMATES FOR FIRST BIRTHS TO TEENAGERS IN 1985 Table 3 presents the estimates of the full cost of public outlays over the 20 year period 1985-2004, for a single family begun by a first birth to a teenager in 1985 (single birth cost of $13,902) , and for all families begun by first births to teenagers in 1985 (single cohort cost of $5.16 billion)
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From page 284... ...
.07 1.02 0.97 2.06 1 Twenty year projection, covering the years 1985-2004. Cost is expressed in 1985 "present values dollars, which means that this is the amount that would have to be set aside in 1985 to cover the 20 year cost of families begun by first birth to a teenager after taking into consideration inflation and the future earning power of a dollar invested in 1985.
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From page 285... ...
Discounting public costs in the same way we did for the basic 20year projection, we arrive at the following figures: the 14 year old would cost the public $46,456 over the assumed 10 year period of welfare dependency; the 15-17 year old would cost the public $44,201 over the assumed 7.5 year period of welfare dependency; and the 18 to 19 year-old would cost the public 630,955 over the assumed 5 year period of welfare dependency. Averaging these results -- after weighting the figures for the numbers of 14 year olds, 15-17 year olds and 18-19 year olds experiencing a first birth -- one arrives at an average, discounted figure of 836,502 for a teenager giving birth for the first time and immediately beg inning an extended period of continuous welfare dependency (as described in ou r assumpt ions)
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From page 286... ...
Such teenagers do not represent the majority of teenagers having children. SOURCES AND ASSUMPTIONS FOR SINGLE BI RTH AND SINGLE COHORT PUBLIC COST E STI^TE S The approach used was, first, to estimate the cost for a single family begun by a first birth to a teenager in 1985, projected over the 20 year period 1985-2004, and then to multiply that estimate by the number of first births to teens in 1985 to get the cohort cost estimate.
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From page 287... ...
In the years of the projection when women are 20 and older, these probabilities are lower (by 4-15 percent, depending on the woman's age and age at first birth) than those used by 5RI and the other studies using the SRI method, because the estimates incorporate the more restrictive welfare eligibility criteria required by the Omnibus Budget Reconciliation Act of 1981.
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From page 288... ...
. All adjusted for 12 percent administrative costs, and for a 75 percent participation rate of AFDC households in the food stamp program (WMCP, Appendix G
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From page 289... ...
Medicaid administrative costs were calculated at 5 percent of benefits, also based on historical data. USING THE COSTS IN BENEFIT-COST ANALYSIS2 The public costs of teenage childbearing are rarely calculated as ends in themselves.
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From page 290... ...
. Recent estimates by Burt suggest that in 1985, the present discounted value of future public costs associated wit-in a first teenage birth are: TABLE 4 -Present Discounted Value of Future Public Costs Associated with a First Teenage Birth Age at First Birth 15 16 17 18 19 Public Expenditures $18,130 $17,851 $17,464 $12,214 $10,671 These costs include assumptions about subsequent births, the likelihood the woman receives AFDC, etc., as explained earlier in this chapter.
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From page 291... ...
If the girl has her first child next year, at age 17, the same logic holds except that now the process is postponed for a year and we need to deposit $17,464 in the bank for next year to cover all future public costs. With current interest rates at about 7 percent, it follows that to build up the $17,464 for next year, we need to deposit an amount this year, C, which solves the equation: C x ~ 1.
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From page 292... ...
The future public costs of moving from one to two children are less than the costs of moving from no children to one. These costs have not been estimated, but the same methodology could be adapted to do so.
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From page 293... ...
Marginal Cost -- The cost to the public of teen births, over and above the costs the public would incur for families begun by a later birth. This marginal cost is thus the full cost of teen births, minus the full cost for later births.
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