Essay on Children’s Health, Fertility Decisions, and Household Dependency on Transfer Income in Developing Countries

My doctoral thesis consists of three chapters. Chapter 1 titled ‘The impact of Ethiopian Community-Based Health Insurance on children's health outcomes’ is a joint work with Prof. Martina Celidoni and Prof. Lorenzo Rocco, both from the University of Padova. Publicly financed Community Based-Health Insurance (CBHI) schemes are typically implemented in developing countries to foster healthcare utilization and improve health outcomes among low-income households. Using the Demographic and Health Survey from 2005 to 2016, we estimate the effects of the Ethiopian CBHI on children's health. Difference-in-differences estimates show that CBHI reduced mortality and the probability of being underweight among children under five. We also find that CBHI significantly reduces wasting, a measure of short-term nutritional deficiency or health conditions, but not stunting, known to be an indicator of long-term chronic malnutrition. Potential mechanisms underlying our results are improved maternal health, access to health care, nutrition, and a reduced risk of poverty. Chapter 2 titled ‘Does Community-Based Health Insurance affect women’s fertility decisions’ is a solo paper. This chapter focuses on estimating the effect of the Ethiopian CBHI on fertility decisions. CBHI might influence fertility through a number of channels, including improving children's survival and income, reduced costs of children's health and pregnancy, adoption of family planning strategies, and women empowerment. These mechanisms can have contrasting effects on fertility and the resulting direction and size of the effect is an empirical question. Based on data from the Ethiopian Demographic and Health Survey, estimates show that women, exposed to CBHI, have a lower probability of having a child than women in the control region. The underlying channels underpinning this finding are increases in modern contraception use, resulting from increased healthcare use, improvements in economic conditions and child survival, and the woman's intention to delay childbearing by at least two years. This reduction is mainly observed in rural, urban, and middle-aged (25-34) women. Chapter 3 titled ‘Rural development projects and transfer income: A step toward economic independence?’ is co-authored with Athur Mabiso (a senior economist at IFAD). The International Fund for Agricultural Development (IFAD) invested over USD 7.1 billion in rural development projects between 2007 and 2021. Using data collected from comparable treated and control households in 25 countries between 2019 and 2021, we investigate its effect on household reliance on transfer income. We implement an inverse probability weighting empirical strategy to further balance treated and control households based on observable characteristics. We find a 2-percentage point reduction in the share of transfer income - extensive margin - and a 16.4\% reduction in the amount of transfer income- intensive margin - for the treated households. Contemporaneous increases in gross income, income from crops and livestock are observed among the treated households implying that the project-promoted productive economic activities translated to less dependence on transfer income. We also show some heterogeneous effects by the gender of household head. These findings point to the potential role of rural development projects in reducing dependence on social protection transfers and offering a pathway to economic independence among the rural poor and vulnerable, including those headed by females.