Inducing Labor: the Impact of Health Insurance on Post-Natal Labor Supply

Abstract

We analyze the role that access to health insurance plays in the widely documented and sharp fall in a mother's labor supply following childbirth. Our analysis uses administrative tax data and exploits variation created by the Affordable Care Act (ACA), which substantially expanded access to health insurance within the U.S. We find that mothers' relative post-childbirth employment increases by 10 percent for births that occur after the expansion and the employment response is pervasive across mothers' pre-birth characteristics. Our analysis suggests improved maternal health care utilization is a contributing factor to the response.

Keywords: child penalty, taxes, labor supply, health insurance

JEL Classification: H1, I13, J13