Thursday, April 25, 2002

I recently did a little Web research on the economics of maternity leave. Is mandated maternity leave a good thing for society? Is it a good thing even for women, or does it reduce their employment opportunities, their pay, or both? I found a few interesting links and tidbits though of course few solid answers.

For hard numbers, I liked the World Bank study by Yana van der Meulen Rodgers. A table at the end shows exactly how countries compare in maternity leave duration. Factoids:

  • US legislation affecting health insurers caused young women's wages to fall 5% though their labor supply did not change.
  • Taiwan's labor law requiring maternity leave indirectly increased women's working hours by 7% and their participation in the work force, without reducing wages. Apparently this is due to more qualified women wanting to work when ensured maternity leave.
  • On the other hand, night-work and overtime restrictions specifically "protecting" women reduced women's welfare by making them less employable.

The Centre for Analysis of Social Exclusion paper by Waldfogel, Higuchi and Abe found that paid maternity leave definition increased the labour participation of new mothers, but could not discuss the costs of this because it did not look at wages.

Randy Albeda has found that unemployment costs were reduced when paid maternity leave was required in that region. However, there was no discussion of how the benefit (reduced UI costs) compared to the costs of the paid maternity leave overall. Presumably the overall cost would be much higher than that particular benefit.

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