Although family planning programs can improve women’s welfare directly through changes in realized fertility, they may also have important incentive effects by increasing parents’ investments in girls not yet fertile. We study these potential incentive effects, finding that family planning may have raised raise girls’ educational attainment substantially. We also find that these early investments are linked to gains in women’s paid labor at prime working ages and to greater support for women’s elderly parents (a marker for women’s bargaining power within the household). Notably, these incentive effects may be larger than the direct effects of family planning alone.
There is longstanding debate about the contribution of family planning programs to fertility decline. Studying the staggered introduction of family planning across Malaysia during the 1960s and 1970s, we find modest responses in fertility behavior. Overall, Malaysia’s total fertility rate declined by about one quarter birth under family planning, explaining only about 10 percent of the national fertility decline between 1960 and 1988. Our findings are consistent with growing evidence that global fertility decline is predominantly due to underlying changes in the demand for children.