Cash Transfers and Delivery Care: Evidence from the Safe Delivery Incentive Program in Nepal

Abstract

This paper examines the effects of the Safe Delivery Incentive Program in Nepal, a cash transfer program that reduced the costs of childbirth in a healthcare facility. Using a difference-in-differences design, I find that low-parity women in high Human Development Index (HDI) districts increased facility delivery by 8.6 percentage points. Despite larger cost reductions, low-parity women in low HDI districts did not increase facility delivery but increased delivery with skilled personnel by 5 percentage points. The impact in low HDI districts was driven by the program’s supply-side incentive, which paid health workers to deliver in facilities or homes. This program had no impact on high-parity women, who become eligible two years later. Pre-existing barriers such as poor infrastructure of roads and facilities, customs, liquidity constraints, and lack of program awareness limited the effectiveness of the program.