OBJECTIVES: To assess cost, clinical outcomes and cost-effectiveness of different types of labor in singleton pregnancies. METHODS: A decision model was used to compare vaginal labor, induced labor and planned cesarean section. All data were taken from the Book of Labor from the University Hospital for Gynecology and Obstetrics “Narodni Front” in Serbia, for labors conducted during one month period in 2011. Successful delivery, (i.e. labor that began up to 42 gestation weeks, without maternal mortality and the newborn Apgar scores greater than or equal to seven in the first and fifth minute of life) was considered as the outcome of the cost effectiveness analysis. To test the robustness of this definition probabilistic sensitivity analysis was performed. RESULTS: From a total of 667 births, vaginal labor was conducted in 98 cases, induced vaginal in 442, while planned caesarean section was performed 127 times. Emergency caesarean section as a complication was much higher in the vaginal labor cohort compared to the induced vaginal cohort (OR = 17.374, 95% CI: 8.522 to 35.418, p < 0.001). The least costly type of labor was induced vaginal labor: average cost 461 euro, with an effectiveness of 98.17%. Both, vaginal and planned cesarean labor, were dominated by the induced labor. The results were robust. CONCLUSIONS: Elective induction of labor was associated with the lowest cost compared to other types of labor, with favorable maternal and neonatal outcomes.