Incentives for small families: concepts and issues
Chomitz, K.M.; Birdsall, N.
Proceedings of the World Bank Annual Conference of Development Economics 1990: 309-339
1990
DOI: 10.1093/wber/4.suppl_1.309Document Number: 351261
This paper examines the benefits and costs of client-targeted family planning incentives: public policies providing specified rewards or penalties for specified fertility-related behaviour. Two rationales for incentives are discussed: first, where markets for contraceptives or contraceptive information fail, incentives can increase families' welfare by reducing barriers to the use of contraception; and, second, where childbearing imposes external costs not borne by parents, incentives can align private and social costs, improving social welfare. These distinct rationales require distinct types of incentives. Incentive costs include economic costs of programme administration; the fiscal (but not economic) cost of the incentive payments; welfare losses incurred if ill-informed or myopic individuals make choices they later regret. Little has been done to assess the costs and benefits of existing or proposed incentive schemes. A framework for doing so is presented. Preliminary evidence from an experiment in the state of Tamil Nadu in India suggests that incentives for short-term trial of contraceptives or for acquiring information may offer substantial benefits at low cost.