This paper studies the health effects of one of the world’s largest demand-side financial
incentive programmes – India’s Janani Suraksha Yojana. Our difference-in-difference
estimates exploit heterogeneity in the timing of the introduction of the financial incentive
programme 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 utilisation are larger
for less educated, poorer, and ethnically marginalised women. We also find evidence of
unintended consequences. The financial incentive programme 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 programme’s own objective of reducing mortality.