Unintended effects of poverty programmes on childbearing in less developed countries: Experimental evidence from Latin America

Because conditional cash transfer (CCT) programmes (which make payments to poor households, conditional on their behaviour) potentially affect both household resource levels and parental preferences for quality vs. quantity of children, they may have unintended consequences for fertility. We use panel data from experimental CCT programmes in three Latin American countries to assess the unintended impact of these programmes on childbearing. Our findings, based on difference-in-difference models, show that the programme in Honduras, which inadvertently created large incentives for childbearing, may have raised fertility by between 2 and 4 percentage points. The CCT programmes in the two other countries, Mexico and Nicaragua, did not have the same unintended incentives for childbearing, and in these countries we found no net impact on fertility. Subsequent analysis examined several potential mechanisms by which fertility in Honduras may have been raised but was not able to identify a primary mechanism with the available data.