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Understanding Financial Incentive Health Initiatives: The Impact of the Janani Suraksha Yojana Conditional Cash Transfer Program on Institutional Delivery Rates and Out-of- Pocket Health Expenditure

By Ritika Jain

Demand-side financing is a policy tool used by nations to incentivize utilization of public institutions, and India’s Janani Suraksha Yojana (JSY) is one of the largest such financial incentive programs in the world. The program pays eligible pregnant women to deliver their babies in health institutions partnered with the program. This paper studies the impact of the JSY on changes in mothers’ health-seeking behavior to deliver in-facility and on the out-of-pocket expenditure (OOPE) for delivery that they incur. Using data from the most recent wave of India’s District-Level Household Survey conducted in 2007-08, this paper finds that the overall introduction of the program in districts in India does not lead to significant changes in institutional delivery or out-ofpocket expenditure outcomes. Further analysis of subpopulations shows that marginalized populations are responsive to JSY introduction in their district with increased probability of delivering in-facility of 1.10 – 3.40 percentage points. Lastly, results show that receiving JSY payments leads to a 1.34 percentage point increase in the probability of incurring OOPE, but a 4.81 percent decrease in the amount of OOPE incurred. The JSY is helping to reduce overall out-of-pocket spending on deliveries. However, the majority of program benefits are not reaching poor pregnant women as the JSY aims, communicating the need for improvement in population targeting.

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Advisor: Alison Hagy, Kent Kimbrough, Manoj Mohanan | JEL Codes: C22, I12, I18 | Tagged: Conditional Cash Transfer, Demand-side Financing, Difference-in-difference-in-differences, Difference-in-differences, Healthcare Reform, Maternal Health

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