Fertility responses to cash transfers in Uruguay

Abstract

Conditional cash transfer (CCT) programs have been the most used tool to reduce poverty and inequality in developing countries in the last decades. In addition to the objectives pursued by these programs, it has been shown that they can have unintended effects on different dimensions. Particularly, they can have an impact on fertility due to an increase in the household's income. This paper examines the relationship between non-labor income and women's childbearing behavior in a developing country. The assignment mechanism of the Uruguayan cash transfer program Asignaciones Familiares – Plan de Equidad (AFAM-PE) alters non-labor incomes across the applicant’s households. I estimate the impact of this program on women's fertility and teenage pregnancy. The identification strategy exploits the discontinuity present in the program eligibility criteria. I combined longitudinal vital statistics provided by the Ministry of Public Health and administrative data to assemble a panel of AFAM-PE applicants aged between 15 and 49 (in 2008 and 2009). The study finds no statistically significant impact of AFAM-PE on fertility rates or teenage pregnancy. These results are robust to different specifications and women samples. This provides evidence against the idea that transfer programs targeting disadvantaged individuals generate a direct effect on fertility.