Free delivery care and supply-side incentives in Nepal’s poorest districts: the effect on prenatal care and neonatal tetanus vaccinations

ABSTRACT In July 2005, Nepal introduced the ‘Safe Delivery Incentive Programme’, which included free delivery care and supply-side incentives for women in the poorest districts. Using a difference-in-differences model and microdata from the Demographic and Health Surveys, we find the policy increased the probability of prenatal care and neonatal tetanus vaccinations, offsetting disparities between women in the poorest districts and rest of Nepal. Moreover, it was associated with a change in the source of prenatal care, from ‘other’ providers to nurses/midwives. Finally, we find that health investment decisions are interconnected across pregnancy stages; free delivery and supply-side incentives affected prenatal care.