How income transfer programs can boost contraceptive use and encourage family planning

By Farhan Majid, Ph.D.
L.E. and Virginia Simmons Fellow in Health and Technology Policy


Despite their widespread availability, women globally continue to report an unmet need for modern contraceptives, with 44% of pregnancies being unplanned worldwide. In the United States, 70% of U.S. women of reproductive age (15–44) are at risk of unintended pregnancy. In South America, Sedgh et al. (2014) report that 62% of pregnancies are unwanted.

At the same time, women in Latin America face spousal discordance in fertility preferences, with men wanting more children than their female partners. Unwanted pregnancies and excess fertility (when actual fertility exceeds desired fertility) are known to contribute to adverse maternal and child health, and to perpetuate a vicious intergenerational cycle of poverty. By increasing women’s empowerment, not only can we expect improvements in fertility outcomes, we can also expect improvements in maternal and child health and, consequently, in development outcomes.

Income plays a central role in fertility behaviors. Families with higher incomes will either decide to have larger families or to dedicate more resources to fewer children. Similarly, if the increase in income is driven by increased maternal income, smaller family sizes are expected to follow, as women may have less time for child-rearing and spend more time working. Meanwhile, an increase in a woman’s income relative to the household income may lead to an increase in her bargaining power within the household, giving her more say over family planning decisions.

Conditional cash transfers (CCTs), or transfers to low-income women that are typically conditional on compliance with certain human capital investments (e.g., children’s schooling and health checks), provide a unique opportunity to investigate the relationship between a woman’s income and her child-bearing behavior. Because CCTs typically target households with school-aged children, and are conditional on a child’s class attendance, the cash transfer is not contingent on the parents’ labor supply. This could lead to an increase or a decrease in fertility depending on various factors such as the relative preference for the number of children or level of resources used to support them. Furthermore, cash transfers are typically given to the mother, and not the father, precisely because they are believed to empower her in household decision-making.

In a bid to shed light on the causal effects of income shocks on women’s reproductive choices, investigators at McGill University and I investigate the effect of Peru’s CCT program, Juntos, on contraceptive use by mothers. Specifically, the research examines whether the program influenced intentional family planning by mothers by changing the use and type of contraceptive methods used.

The research findings show that Juntos influenced the beneficiaries’ reproductive choices in several interesting ways.

First, Juntos led to an increase in birth control use, but only after the program had been in place for a few years. A placebo analysis further shows that no such effect is found on wealthier households not exposed to the program.

Second, Juntos increased the use of modern birth control methods relative to traditional methods, such as rhythm or abstinence. Women participating in Juntos were more likely to switch from traditional to modern methods of birth control, such as condoms, oral contraceptives, implants, injections or sterilization. Our analysis reveals that these effects persist years after the initial roll-out of Juntos. We furthermore find no evidence of pre-existing trends in our data that could explain such patterns, suggesting that our estimates are causal rather than mere associations.

The findings from this research suggest that policymakers seeking to empower low-income women through cash transfer programs should consider the following:

First, cash transfers alone cannot fully empower women to assert their fertility preferences. The study shows that CCTs enable women to clandestinely take control of their fertility when they are part of a couple that disagrees on the size of their family. This fact underlines that these women are not fully empowered in the first place and highlights the limits of CCTs in promoting open empowerment in this domain. This is an especially important finding when we consider that CCTs were in part motivated to help solve failures arising from intra-household bargaining power imbalances.

Second, cash transfers can make family planning more accessible. The research speaks to the complex ways in which economic development may affect the demand for family planning and, hence, fertility. Even if modern contraceptive technologies are widely available and affordable, women — and couples — still bear significant costs. Despite the intra-household bargaining costs implied by the need to conceal use, CCTs like Peru’s Juntos may be able to reduce the monetary costs of accessing such services.

Third, policymakers should pay close attention to unintended effects of CCTS in intra-household decision-making. Our findings suggest that policymakers need a better grasp of the mechanisms through which programs meant to empower women affect decision-making in domains that are not directly targeted by the program itself. Those who design cash transfer programs in the U.S. or elsewhere need to pay greater attention to the unintended effects.