Although reproductive health advocates consider family planning programs the intervention
of choice to reduce fertility, there remains a great deal of scepticism among economists as
to their effectiveness, despite little rigorous evidence to support either position. This study explores
the effects of family planning in Ethiopia using a novel set of instruments to control for
potential non-random program placement. The instruments are based on ordinal rankings of
area characteristics, motivated by competition between areas for resources. Access to family
planning is found to reduce completed fertility by more than 1 child among women without education.
No effect is found among women with some formal schooling, suggesting that family
planning and formal education act as substitutes, at least in this low income, low growth setting.
This provides support to the notion that increasing access to family planning can provide
an important, complementary entry point to kick-start the process of fertility reduction.