Does shorter postnatal hospital stay lead to postdischarge complications? An instrumental variables approach

We exploit the difference in means of postnatal hospital stays between beneficiary mothers of Janani Suraksha Yojana (JSY) and control mothers to estimate causal effects of postnatal hospital stay (PHS) on post-discharge complications (PDCs) of a mother and her newborn. We argue that JSY increases the demand for institutional deliveries in those hospitals, which are assigned by the government to provide such services to the JSY recipients. Given the limited supply of beds, health professionals, and other facilities, an excess demand for institutional deliveries in those hospitals force JSY recipients to stay shorter after births compared to nonrecipients of JSY who are free to deliver in any hospital. Thus, the dummy for JSY becomes a suitable instrument for PHS. Using instrumental variables (IV) regressions, we find that PHS has statistically significant negative causal effects on half of the available PDCs in the data, including abdominal pain, vaginal discharge, convulsion and severe headache of a mother, and fever or cold of the newborn.