Steven Levitt and John Donohue defend a finding made famous by “Freakonomics”

From The Economist:

More than two decades have passed since we published an academic paper linking the legalisation of abortion to the enormous decline in American crime since the 1990s. The underlying theory is straightforward. Children who are unwanted at birth are at risk of a range of adverse life outcomes and commit much more crime later in life. Legalised abortion greatly reduced the number of unwanted births. Consequently, legalised abortion will reduce crime, albeit with substantial lags.

Our paper created much controversy, which was further stoked by a chapter on the topic in the best-selling book “Freakonomics”, written by one of us with Stephen Dubner, published in 2005. For many, it was more important to spin a political response to our hypothesis than to evaluate whether it was correct.

The data available at the time strongly supported our hypothesis. We showed, for instance, that crime began falling sooner in the five states that legalised abortion in advance of Roe v Wade, the US Supreme Court decision that made abortion available legally nationwide. We documented that crime in states with high and low abortion rates followed nearly identical trends for many years, then suddenly and persistently diverged only after the birth cohorts exposed to legal abortion reached the age at which they would commit crime. Consistent with our theory, looking at arrest data, which reveal the age of the offender, the declines in crime were concentrated among those born after abortion became legal.

These data patterns do not, of course, make an open-and-shut case. No randomised experiment has been conducted on this topic. We also didn’t help our own case by mislabelling the set of control variables included in one of the specifications in one of our tables—a regrettable mistake (later corrected) which led some people to dismiss all of the paper’s findings. One of the most vocal and consistently sceptical voices arguing against our findings has been The Economist, which has written about our study on three occasions (most recently last month), each time taking a critical and dismissive stance.

We concede that reasonable people could disagree about how convincing the findings were in our initial paper. The analysis was retrospective, and there is always the concern that researchers have cherry-picked their findings, or that perhaps it was just pure coincidence that the patterns emerged.

There is, however, something unique about our hypothesis, which allows a second test of the theory that is far closer to the ideal of the scientific method. There is a long lag between abortions being performed and the affected cohort reaching the age at which crime is committed. Thus, we could already at the time of our first academic paper in 2001 make strong predictions about what our theory would predict should happen to future crime. Indeed, at the end of that paper, we made the following prediction: “When a steady state is reached roughly 20 years from now, the impact of abortion will be roughly twice as great as the impact felt so far. Our results suggest that all else equal, legalised abortion will account for persistent declines of 1% a year in crime over the next two decades.”

It is rare—almost unprecedented—in academic economics to be able to make a testable prediction and then to go back and actually test it decades later. That’s what we did in a paper published in 2020. Our methodological approach was straightforward: mimic the specifications reported in our original paper, but limit the time period to the years that were out of sample, ie, those after our original data ended.

The results provided stunning corroboration of our predictions. For each of the seven different analyses we had presented in the initial 2001 paper, the results for next two decades of data were at least as strong as the results in our initial dataset, and in most specifications even stronger. This included what the main critics of our 2001 paper called the “crucial” test, showing that the abortion rate at the time of any birth cohort negatively correlated with the age-specific arrest rate for that cohort years later as it moved through ages 15–24, while perfectly controlling for whatever other factors were influencing crime in a given state and a given year. We would argue that, short of a randomised experiment, this is some of the most compelling evidence one could present.

The magnitude of the implied impacts we are talking about is huge. If you look over the entire sample, violent-crime rates fell by 62.2 percentage points in high-abortion states whereas they rose by 3.1% in low-abortion states.

Though there is not complete acceptance of our hypothesis among academics, all agree that if our paper is not correct, then there is no viable explanation for the enormous drop in crime in America that started in the early 1990s. Indeed, there is not even an arguable theory to supplant the abortion-crime link. Exposure to lead in the environment might, perhaps, be the next best hypothesis. But as we showed in our 2020 paper, when one controls for both environmental lead and abortion, the coefficient on abortion remains large while the coefficient on environmental lead is greatly reduced and loses statistical significance.

It seems fair to ask why, in spite of strong supporting evidence, no academic contradiction of any of the findings of our 2020 paper and support for the abortion-crime link from international evidence, so many observers remain sceptical of the hypothesis. Not surprisingly, those whose livelihoods came from fighting crime during the great crime drop were not keen to conclude that their approaches—whether more police, more incarceration or particular social programmes—however important they might have been, were not the dominant factor in the decline. Another possible explanation is that people across the political spectrum were uncomfortable with our conclusions. Many people would prefer that our hypothesis not be true—perhaps not recognising that the core finding is that when women can control their fertility the life outcomes of their children are greatly enhanced.

Link to the rest at The Economist