This study examines the effect of abolishing user fees from the maternal and child health (MCH) services on child quantity and quality in South Africa in the post-apartheid era. Exploiting exogenous variation in exposure to the policy effect, we find that the policy resulted in lower fertility in households and greater educational attainment of children a decade later. The absence of the effects among children not subject to the policy eliminates channels through heterogeneous preexisting trends or unobserved concurrent changes. The important policy implications are (i) the theoretical predictions of the child quantity-quality tradeoff model characterize reproductive behavior among parents in developing countries; and (ii) MCH policy serves as a motivating force underlying the demographic transition and human capital development.
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