The effects of expanded social health insurance on young mothers: Lessons from a pro‐choice reform in Uruguay

With the implementation of the National Integrated Health System in 2007, the Uruguayan government extended social health insurance (SHI) to groups of individuals previously covered by the public safety net (PSN) or that paid for private insurance out‐of‐pocket. The policy allowed new beneficiaries to choose care from a set of private providers. In this study, we focus on the extension of SHI to adolescent mothers previously covered by the PSN. Exploiting the gradual incorporation of children of formal workers during the 2008–2013 period, and the geographic variation in the intensity of the reform, we find suggestive evidence that the increase in choice associated to the expansion of SHI decreased adolescent fertility, improved prenatal care and birthweight, and decreased first year mortality among low birthweight infants. These effects were only observed in the medium run, suggesting initial choice frictions and input shortage. We provide evidence that families increased their choice of private providers and that market concentration decreased in certain areas of the country, supporting the hypothesis that choice, and possibly competition, were the main mechanisms behind the findings.