Background Adverse maternal and neonatal outcomes disproportionately afflict low and middle-income countries, which experience high-unmet need for safe and skilled attendance at birth. This study sought to investigate how choices for place of birth were made in Kenya during the era of a national maternal subsidy. Methods The study employed data from the Kenya Demographic Health Survey 2014 and involved data from women who experienced a birth around the time when the maternity subsidy was in place. After testing for multi-collinearity of variables and addressing endogenous endogeneity using two-stage residual inclusion, probit regression models were estimated. The choice for place of birth was employed as a binary outcome variable. Results Overall, data from 4,772 women were included in the analysis. The women’s mean age was 27.7 years and majority (83.8%) were married or staying with their sexual partners. Among these women, 2748 (57.5%) had elected institutional births. Regression analysis illustrated that woman’s age, the woman and partner’s education, economic empowerment, low parity, low county poverty headcount rate and access to medical insurance. Further, access to complementary reproductive services such as antenatal care and family planning and the existence of the maternity subsidy were associated with increased likelihood to choose deliveries in health facilities. Conclusions The existence of the maternal subsidy confers women increased potential to elect health institutions as a preferred place for birth, although this was influenced by other factors. These findings imply that investments, which prevent teen pregnancies, reduce domestic and national poverty, increase education attainment, expand autonomy of women in decision making and promote access to the continuum of reproductive health services can optimize choice making during the existence of the maternity subsidy favoring access to safe institutional births.