The Impact of Unanticipated Economic Shocks on the Demand for Contraceptives: Evidence from Uganda

We investigate the impact of unanticipated economic shocks on the use of contraceptives for childbirth control in Uganda using a nationally representative panel of women. To complement our reduced form analysis, we use both intra-village and inter-village variation in rainfall shocks between 2009 and 2012 to identify the impact of agricultural income on the adoption of contraceptives by Ugandan women and their husbands. Our results indicate that women in Uganda, along with their husbands, use contraceptives strategically to postpone childbirth during negative shocks. Our baseline coefficient estimate reveals that a 0.10 log-point adverse rainfall shock increases the demand for contraceptives by 3.8 percentage points. This translates to a 6.7% increase in the likelihood of contraceptives demand. Results from the two-stage least-square instrumental variable estimation for the impact of income complements the strategic birth control story from the reduced form estimates of this paper. More importantly, we find suggestive evidence-linking preventive childbirth decisions to food insecurity during drought. Copyright (c) 2017 John Wiley & Sons, Ltd.