The impact of the birth control pill is astounding. The average American woman bore 3.65 children in 1960, the year before the pill became available. By 1980, the birth rate had dropped to just 1.84 children, below the level needed to maintain a stable population. This rate has never been above 2.1 (and then only for a single year) since 1971. The only reason why the population of the United States has continued to rise is higher average life expectancies — from 69.8 years in 1960 to 78.2 years today — and a far greater number of immigrants, which amounted to 6% of the population in 1960 but make up nearly 14% today. On the other hand, a third of the wage growth enjoyed by women since the 1960s has been the result of widely available birth control, according to Planned Parenthood president Cecile Richards.
That wage growth is not easily discounted, and it’s worth noting the discrepancy between market gains in the periods prior to and following the pill’s introduction. In the five decades leading up to the pill’s approval, the Dow Jones Industrial Average grew at an annualized rate of 4.7%. In the five decades that followed, that growth rate rose to 5.9% per year. Over the same post-pill time frame, the labor force participation rate rose from about 59.5% (where it had been for decades) to 65%, which meant that 17 million more people (nearly all of them women) were in the workforce than would have been under pre-pill participation rates. That’s a whole lot of earnings to add to the national product.
The major pharmaceutical companies haven’t generated a massive amount of revenue out of all this societal change, though. The American market for oral contraceptives totals accounts for less than $4 billion per year in sales, and only Johnson & Johnson (NYSE:JNJ) commands significant branded market share through the sales of Ortho-branded contraceptive pills. Since the basic formulations have been around for so long, most oral contraceptives now exist in generic form. That’s an opportunity for generic-focused drugmaker Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), which acquired the women’s health subsidiary drugmaker known as Theramex at the start of 2011.
The article Is Motherhood Better or Worse for the Economy? originally appeared on Fool.com.
Motley Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson and United Online.
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