Deprivation Payments, Regional Disparities in Birth Outcomes, and the Role of Community Midwives

Abstract

Deprivation payments raise per-patient fees for professionals serving socioeconomically disadvantaged neighborhoods, without conditioning remuneration on effort or outcomes. We evaluate their effectiveness using the policy’s introduction in the Netherlands, which increased community midwives’ fees by 23 percent for pregnancies in officially designated deprived neighborhoods. Exploiting a discontinuity in payments based on neighborhood deprivation scores, we show that the reform led to significant improvements in birth outcomes for boys born in deprived areas, with no detectable effects for girls. Gains arise among both low-risk boys, treated exclusively by community midwives, and high-risk boys, who were referred to higher medical tiers. We find no evidence that mothers relocated to access higher-paid providers, and community midwife mobility explains at most a small portion of the effect. These results demonstrate that unconditional fee increases can improve care quality in disadvantaged populations, consistent with mechanisms through which higher pay enhances provider effort and attention.