AbstractObjectiveTo assess the cost‐effectiveness of induction of labour (IOL) at 41 weeks of gestation compared with expectant management until 42 weeks of gestation.DesignA cost‐effectiveness analysis alongside the Swedish Post‐term Induction Study (SWEPIS), a multicentre, randomised controlled superiority trial.SettingFourteen Swedish hospitals during 2016–2018.PopulationWomen with an uncomplicated singleton pregnancy with a fetus in cephalic position were randomised at 41 weeks of gestation to IOL or to expectant management and induction at 42 weeks of gestation.MethodsHealth benefits were measured in life years and quality‐adjusted life years (QALYs) for mother and child. Total cost per birth was calculated, including healthcare costs from randomisation to discharge after delivery, for mother and child. Incremental cost‐effectiveness ratios (ICERs) were calculated by dividing the difference in mean cost between the trial arms by the difference in life years and QALYs, respectively. Sampling uncertainty was evaluated using non‐parametric bootstrapping.Main Outcome MeasuresThe cost per gained life year and per gained QALY.ResultsThe differences in life years and QALYs gained were driven by the difference in perinatal mortality alone. The absolute risk reduction in mortality was 0.004 (from 6/1373 to 0/1373). Based on Swedish life tables, this gives a mean gain in discounted life years and QALYs of 0.14 and 0.12 per birth, respectively. The mean cost per birth was €4108 in the IOL group (n = 1373) and €4037 in the expectant management group (n = 1373), with a mean difference of €71 (95% CI −€232 to €379). The ICER for IOL compared with expectant management was €545 per life year gained and €623 per QALY gained. Confidence intervals were relatively wide and included the possibility that IOL had both lower costs and better health outcomes.ConclusionsInduction of labour at 41 weeks of gestation results in a better health outcome and no significant difference in costs. IOL is cost‐effective compared with expectant management until 42 weeks of gestation using standard threshold values for acceptable cost per life year/QALY.Tweetable AbstractInduction of labour at 41 weeks of gestation is cost‐effective compared with expectant management until 42 weeks of gestation.