This dissertation analyzes family decision-making about labor force sector participation, health insurance, fertility, and prenatal care in Mexico, where a large proportion of the population has little or no access to medical services and where the incidence of low birth weight and infant mortality rate are relatively high. The lack of access to health care is mainly due to a large uncovered labor market sector, where workers are not eligible for government health benefits. I develop and estimate a forward-looking, dynamic discrete choice model that can be used to study the interplay between employment and insurance decisions and pregnancy outcomes. The model incorporates a birth weight production function and a probability of infant death. I estimate the model using panel data from the Mexican Family Life Survey (MxFLS). The estimates show that prenatal care has a positive effect on birth weight of 13% on average. It is estimated that being born with normal birth weight, as opposed to low birth weight, decreases the probability of infant death from 37% to 5%. Additionally, I use the model to evaluate alternative policies aimed at increasing access to prenatal care services, such as the Universal Access Health Insurance (SPS), health care vouchers programs, and construction of health care centers. The most beneficial policy, in terms of pregnancy outcomes, is to build health care centers in every locality to decreasethe cost of prenatal care; low birth weight incidence decreases from 6.77% to 5.68%, and infant mortality rate drops from 3.96% to 3.83%. The government’s SPS has smaller impact on infant health because it has a strong crowding-out effect on the demand for private doctors, which are of higher quality than government hospitals. Vouchers programs have positive impact but of smaller magnitudes and at a higher cost to the government than SPS. Results from the policies’ simulations suggest that, if the objective is to improve infant health, the government should not only try to increase the usage of prenatal care through subsidies, but it should implement policies aimed at improving the quality of the government health centers and their physical availability in the localities.