Financial incentives and delivery care: Evidence from the Safe Delivery Incentive Program in Nepal

This paper examines the effects of the Safe Delivery Incentive Program in Nepal, a cash transfer program that reduced the costs of childbirth in healthcare facilities. Women giving birth for the first, second, or third time (below-cutoff) became eligible in 2005, and women giving birth for the fourth time or more (above-cutoff) became eligible two years later. Using a difference-in-differences design, I find that below-cutoff women in high Human Development Index (HDI) districts increased facility delivery by 8.8 percentage points. Despite larger cost reductions, below-cutoff women in low HDI districts did not increase facility delivery but increased home delivery with skilled personnel by 4.8 percentage points. The program had no impact on above-cutoff women, who become eligible 2 years into the program. I suggest that pre-existing barriers such as poor infrastructure of roads and facilities, customs, liquidity constraints, and lack of program awareness limited the program's effectiveness.