What Is the Case for Paid Maternity Leave?

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S ABSTRACT What Is the Case for Paid Maternity Leave?Paid maternity leave has gained greater salience in the past few decades as mothers have increasingly entered the workforce. Indeed, the median number of weeks of paid leave to mothers among OECD countries was 14 in 1980, but had risen to 42 by 2011. We assess the case for paid maternity leave, focusing on parents' responses to a series of policy reforms in Norway which expanded paid leave from 18 to 35 weeks (without changing the length of job protection). Our first empirical result is that none of the reforms seem to crowd out unpaid leave. Each reform increases the amount of time spent at home versus work by roughly the increased number of weeks allowed. Since income replacement was 100% for most women, the reforms caused an increase in mother's time spent at home after birth, without a reduction in family income. Our second set of empirical results reveals the expansions had little effect on a wide variety of outcomes, including children's school outcomes, parental earnings and participation in the labor market in the short or long run, completed fertility, marriage or divorce. Not only is there no evidence that each expansion in isolation had economically significant effects, but this null result holds even if we cumulate our estimates across all expansions from 18 to 35 weeks. Our third finding is that paid maternity leave has negative redistribution properties. The program makes regressive transfers both from ineligibles to eligibles and within the group of eligible mothers. Since there was no crowd out of unpaid leave, the extra leave benefits amounted to a pure leisure transfer, primarily to middle and upper income families. Finally, we investigate the financial costs of the extensions in paid maternity leave. We find these reforms had little impact on parents' future tax payments and benefit receipt. As a result, the large increases in public spending on maternity leave imply a considerable increase in taxes, at a cost to economic efficiency. Taken together, our findings suggest the generous extensions to paid leave were costly, had no measurable effect on outcomes and poor redistribution properties. In a time of harsh budget realities, our findings have important implications for countries that are considering future expansions or contractions in the duration of paid leave.JEL Classification: J13, J18, H42

Labor force participation: what has happened since the peak?

“…They also find that the program reduced the number of mothers without jobs, although this effect was not quite statistically significant. Other research on paid leave programs has shown that access to paid leave increases the likelihood that a recent mother will return to her employer in the United States, the United Kingdom, and Japan (Waldfogel, Higuchi, and Abe 1999), although a study of paid leave in Norway found no effect on labor force participation, perhaps reflecting stronger pre-existing work supports (Dahl et al 2013).…”

The Long-Run Effect of Maternity Leave Benefits on Mental Health: Evidence from European Countries

“…During the second half of the 20 th Century, most high-income countries enacted comprehensive maternity leave legislation that provides women the right to a period of job-protected leave around childbirth (Ruhm & Teague, 1998). An extensive literature has examined impacts of these policies on labor market (Dahl et al, 2013;RossinSlater et al, 2013;Ruhm, 1998;Ruhm, 2011) and child outcomes (Baker & Milligan, 2008;Berger et al, 2005;Rossin, 2011;Ruhm, 2000Ruhm, , 2011Staehelin et al, 2007;Tanaka, 2005). However, few studies have examined the impact of maternity leave policies on women's health, with existing studies focusing on health around childbirth (Dagher et al, 2013;Ruhm, 2011;Staehelin et al, 2007).…”

Nordic Economic Policy Review

“…Carneiro et al (2015) and Dahl et al (2015) show that the different reforms that increased parental leave in Norway had no effect on long-run maternal labor supply. Similarly, Liu and Skans (2010) find no effect on mothers' earnings after an increase in parental leave in Sweden.…”