Habit Persistence and Teen Sex: Could Increased Access to Contraception Have Unintended Consequences for Teen Pregnancies?

We develop a dynamic discrete-choice model of teen sex and pregnancy that incorporates habit persistence. Habit persistence has two sources here. The first is a "fixed cost" of having sex, which relates to a moral or psychological barrier that has been crossed the first time one has sex. The second is a "transition cost," whereby once a particular relationship has progressed to sex, it is difficult to move back. We estimate significant habit persistence in teen sex, implying that the long-run effects of contraception policy may be different from their short-run counterparts, especially if the failure rate of contraception is sufficiently large. Programs that increase access to contraception are found to decrease teen pregnancies in the short run but increase them in the long run.