Do unconditional cash transfers increase fertility? Lessons from a large-scale program

Abstract

We examine the impact of unconditional cash transfers (UCTs) on fertility. We develop a theoretical model that demonstrates how UCTs affect fertility decisions, time allocations for leisure, labor and childrearing, and child health through health spending. We then empirically examine the impact of UCTs on fertility in Pakistan. Our theoretical model suggests that under certain conditions, UCTs are likely to increase fertility if UCTs increase child health regardless of how they affect parental leisure, labor and childrearing time. The empirical results suggest that UCTs have a positive effect on fertility.