1. A DOLLAR A DAY KEEPS THE BABIES AWAY? PREVENTING SECONDARY PREGNANCY IN NORTH CAROLINA Presented By: AJ Bickford PADM 5111

2. Make Good Decisions  Libertarian paternalism at work  Drawing from social science research, individuals can and often do make PRETTY BAD decisions.  These decisions could be avoided if people had complete information, unlimited cognitive abilities and complete self- control  http://www.youtube.com/watch?v=lI-8Ifi2PVIwww.youtube.com/watch?v=lI-8Ifi2PVI

3. So What’s the Problem?  The Unites States has the highest adolescent pregnancy rate in the industrialized world.  In 2006, the number of births for girls aged 15 to 17 was about 139,000, or 22 for every 1,000 girls.  1/3 of girls in the United States got pregnant before age 20, and more than 435,000 babies were born to teens between 15 and 19 years in 2006.  Of the teens who do get pregnant almost 17% become pregnant again within a year.  Estimated 60% of those who become pregnant before age 15 will have three children by age 19

4. Social and Economic Costs  Direct and indirect costs of adolescent pregnancy in the United States now surpass $34 billion annually.  Adolescent mothers have more children overall, children closer together, and report more of their births as unwanted than do other mothers.  Repeated pregnancy in adolescence is associated with failure to complete high school and reduced economic sufficiency  Delaying a second pregnancy offers adolescents better chances to mature physically and psychologically, to finish high school, plan for the future, and develop vocational skills.

5. A Dollar-A-Day  During the first five years, 65 adolescent mothers participated in the Dollar-A-Day program.  Members ranged from 13 to 16 years of age on admission.  Primarily from the lower socioeconomic group.

6. A Dollar-A-Day (cont)  The group meet every Monday for an hour.  First part of the program consisted of personal goal setting and reporting.  Each adolescent set a goal to achieve during the following week, and those goals and accomplishments were recorded.  Social exchange theory was used to help assist mothers in defining their values and setting short and long term goals  At the end of each session, each participant present receives 7 $1 bills, one for each day of the week.

7. Results and Significance  After five years of operation, only 15% of the 65 girls who had been enrolled in the program experienced subsequent pregnancies.  Following their first birth, 85% of the Dollar-A-Day group remained non-pregnant, as compared with a 50–70% repeat pregnancy rate reported from other studies.  A 50% decrease in subsequent pregnancy rates would decrease the national cost of adolescent births by approximately $17 billion.

8. Pregnancy: A Nudgeable Choice  Thaler and Sunstein give criteria characterizing choices that are amenable to nudges:  Benefits now – Costs later: benefits of sex now, costs of a child 9 months later;  Self-control: hard to control ourselves when aroused;  Frequency: becoming pregnant and raising a child is not something easily practised;  Feedback: clear and immediate feedback is not available (the child might be cute and affordable a couple of years in, but that may not continue).

9. The Dollar-a-Day Nudge  At first glance, $1 a day is a simple monetary incentive that both Econs and Humans would respond to.  But according to T+S, it is a nudge, so Econs would not respond to it.  Makes sense: the $1 a day is negligible compared to the cost of raising a child, so it should not affect an Econ’s decision.

10. The Dollar-a-Day Nudge (cont.)  Reasons why the $1 a day nudged Humans:  Salience: $1 a day is very noticeable, while the opportunity cost of not going to school or work while caring for the child is easier to neglect (in T+S).  Cash immediately available: little effort required to receive it.  Made use of Humans’ asymmetric value function: the $1 gains were segregated.

11. Other Nudges at Play  Nudges that exploit human desire to conform:  Priming: Voicing goals and intentions among others makes them more likely to be achieved.  Social norms are both constructive and destructive: “My name is ____, and today I am not pregnant”: being not pregnant is the norm, and most conformed to it. However, another norm was that each participant already had a child, which prompted one girl to become pregnant again.  Peer Pressure: norms and priming were more effective because the girls became attached to each other and to the leaders.

12. Other Nudges at Play (cont.)  Feedback/Education  Education about sexuality, contraception and parenting was occasionally provided, as were referrals to child care, health and finances organizations.  Every week saying that they were not pregnant and receiving $7 served as positive feedback (and also as a reminder) for not getting pregnant.  Mapping from choice to welfare  Mapping the choice to have sex to all the financial, emotional and professional consequences of having a child is difficult.

13. Conclusion  Unclear which nudges in the Dollar-a-Day program most influenced the teens’ decisions to not get pregnant.  But it is clear that these small changes in choice architecture, the meetings, feedback and small allowance, improved the lives of the program participants.  Where else could a similar Dollar-a-Day program work?