Financial Incentives in Health: New Evidence from India's Janani Suraksha Yojana

47 Pages Posted: 30 Sep 2011

See all articles by Timothy Powell-Jackson

Timothy Powell-Jackson

London School of Hygiene & Tropical Medicine

Date Written: September 29, 2011


This paper studies the health effects of one of the world’s largest demand-side financial incentive programes - India’s Janani Suraksha Yojana. Our difference-in-difference estimates exploit heterogeneity in the timing of the introduction of the financial incentive programs across districts. We find that cash incentives to women increased access to maternity services but failed to improve neonatal or early neonatal mortality, even in districts with relatively high quality of care. The positive effects on utilization are larger for less educated, poorer, and ethnically marginalized women. We also find evidence of unintended consequences. The financial incentive program was associated with a substitution away from private health providers, an increase in fertility and a positive improvement in breastfeeding behaviour. These findings demonstrate the potential for financial incentives to have unanticipated health effects, which may, in the case of fertility, directly undermine the program’s own objective of reducing mortality.

Keywords: Financial Incentives, Health, India

JEL Classification: I18, I12

Suggested Citation

Powell-Jackson, Timothy, Financial Incentives in Health: New Evidence from India's Janani Suraksha Yojana (September 29, 2011). Available at SSRN: or

Timothy Powell-Jackson (Contact Author)

London School of Hygiene & Tropical Medicine ( email )

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