There is longstanding debate in population policy about the relationship between modern contraception and abortion. Although theory predicts that they should be substitutes, the existing body of empirical evidence is difficult to interpret. In this paper, we study Nepal’s 2004 legalization of abortion provision and subsequent expansion of abortion services. Using four waves of rich individual-level data representative of fertile-age Nepalese women, we find robust evidence of substitution between modern contraception and abortion. This finding suggests that an effective strategy for reducing expensive and potentially unsafe abortions may be to expand the supply of modern contraceptives.
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