Right-sizing Incentives

Area of Science:

• Public Health
• Health Economics
• Development Economics

Background:

• Maternal healthcare utilization remains suboptimal in many low-income countries.
• Understanding effective interventions to promote formal medical care is crucial for improving maternal and child health outcomes.
• Conditional cash transfers (CCTs) are a policy tool increasingly used to influence health behaviors.

Purpose of the Study:

• To evaluate the impact of different levels of conditional cash payments on formal medical care use by expectant mothers in Nigeria.
• To assess the effect of an information signal about pregnancy risk on healthcare seeking behavior.
• To investigate potential spillover effects of these interventions on children's healthcare utilization.

Main Methods:

• A field experiment was conducted in Nigeria involving expectant mothers.
• Participants were offered varying amounts of cash payments (N2500, N4000, N10000) conditional on using formal medical care.
• A secondary intervention group received information about pregnancy risk.

Main Results:

• Conditional cash payments demonstrated highly non-linear effects, with the most significant impact observed at the extensive margin (i.e., initial uptake).
• Returns to increasing incentive size diminished rapidly beyond a certain threshold.
• Significant positive spillover effects were found, increasing healthcare use for index children and other children within the household.
• The information signal intervention showed largely null effects on healthcare utilization.

Conclusions:

• Conditional cash transfers can be an effective tool for increasing formal medical care use among pregnant women, but optimal incentive levels are crucial.
• The findings highlight the importance of considering spillover effects on child health when designing maternal health interventions.
• Information-based interventions alone may be insufficient to drive significant behavioral change in this context.