Maternity Leave and the Responsiveness of Female Labor Supply to a Household Shock
34 Pages Posted: 29 Jun 2013
Female labor supply can insure households against shocks to paternal employment. The paper estimates whether the female labor supply response to a paternal employment shock differs by eligibility to maternity employment protection. We exploit time-state variation in the implementation of unpaid maternity leave through the Family and Medical Leave Act (FMLA) in the US which increased employment protection from 0 to 12 weeks. We find that mothers eligible for FMLA speed up their return to work in response to a paternal shock, with a conditional probability of being in work 53% higher than in households with no paternal shock. In contrast, there was a negligible insurance response for mothers with no employment protection.
Keywords: female labor supply, insurance, maternity leave
JEL Classification: I30, J13, J20, J64
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