Free contraceptives and fertility: Evidence from a supply disruption in the Philippines

I take advantage of the gradual phase out of USAID’s contraceptive donations to the Philippines from 2004 to 2008 as a natural experiment that severely disrupted publicly-provided contraceptive supply. Prior to this, more than two-thirds of the country’s contraceptive users relied on free supplies from the public sector, which in turn relied entirely on donations from international agencies like USAID. Because it succumbed to pressure from the Catholic church, the national government did not fill the shortage that occurred. While it devised a progressive allocation schedule for the distribution of the declining supply of free contraceptives to the provinces, the actual distribution was erratic and intermittent due to shipment delays, inventory miscalculations, and lumpy deliveries induced by round lot sizes. Utilizing substantial geographic and temporal variation in the share of women age 15-49 that had provisions for free contraceptive supplies at the province-quarter level, this research looks into the short-run fertility impact of the contraceptive supply disruption. Results show that a demonstrable linkage exists between diminishing contraceptive supply from the public sector and higher birth rates, especially for the poor and the less educated, which suggests that couples’ compensating behavior may be limited or incomplete.