The Effect Of Prenatal Maternity Leave On Short And Long .
The Effect of Prenatal Maternity Leave onShort and Long-term Child OutcomesbyAlexander AhammerMartin HallNicole SchneeweisOctober 2018Corresponding author: alexander.ahammer@jku.atChristian Doppler LaboratoryAging, Health and the Labor Marketcdecon.jku.atJohannes Kepler UniversityDepartment of EconomicsAltenberger Strasse 694040 Linz, Austria
The Effect of Prenatal Maternity Leave onShort and Long-term Child Outcomes†Alexander Ahammera,b , Martin Hallaa,b,c,d , Nicole Schneeweisa,b,c,eabJohannes Kepler University Linz, AustriaChristian Doppler Laboratory Aging, Health, and the Labor Market, LinzcIZA, Institute for the Study of Labor, BonndGÖG, Austrian Public Health Institute, ViennaeCEPR, Centre for Economic Policy Research, LondonOctober 4, 2018(First version: March 1, 2018)AbstractMaternity leave policies are designed to safeguard the health of pregnant workers and theirunborn children. However, little is known about the impact of existing policies, which arenot evidence-based. We evaluate a maternity leave extension in Austria, which increasedmandatory leave from 6 to 8 weeks prior to birth. We exploit that the eligibility for theextended leave was determined by a cutoff due date. Our estimates capture a reduction ofin utero exposure to maternal stress caused by work in the third trimester of pregnancy.We find no evidence for significant effects of this extension on children’s health at birth orlong-term health and labor market outcomes. Subsequent maternal health and fertility arealso unaffected. We conclude that, for workers without problems in pregnancy, mandatorymaternity leave should not start prior to the 35th week of gestation.JEL Classification: J13, I18, J28, I13, J83, J88.Keywords: Maternity leave, fetal origins hypothesis, infant health, birth outcomes, birthweight, long-term child outcomes, fertility.†Corresponding author: Alexander Ahammer, Department of Economics, Johannes Kepler University Linz,Altenberger Straße 69, 4040 Linz, Austria; phone: 43(0)732/2468/7372; e-mail: alexander.ahammer@jku.at.For helpful discussions and comments we would like to thank seminar participants at the University of Cologne,the Institute of Economics Zagreb, the COMPIE 2018 in Berlin, and the Labor Economics Workshop 2017 hostedby the Institute for Advanced Studies in Vienna. Financial support from the Christian Doppler Laboratory ‘Aging,Health and the Labor Market’ is gratefully acknowledged. The usual disclaimer applies.
I. IntroductionDeveloped countries have special regulations in place to address the safety and health of pregnant workers and their unborn children. One important element of these regulations is maternityleave (ML). This is the temporary employment-protected period of absence for women aroundthe time of childbirth and should be distinguished from parental leave.1 There is considerablevariation in the ML arrangements across countries in terms of income support, obligation, andpre- and postnatal durations.2 In this paper, we are interested in prenatal ML. We evaluate theimpact of maternal employment during pregnancy on child and maternal outcomes. Despite thepopular belief that prenatal ML is beneficial to the infant and mother, empirical evidence on theimpact of prenatal ML is extremely scarce and existing policies are not evidence-based.3In particular, we evaluate a prenatal ML extension in Austria. Until 1973 statutory ML prohibited employment in the period from 6 weeks before to (usually) 6 weeks after the delivery.A reform in the year 1974 increased both mandatory pre- and postnatal ML from 6 to 8 weeks(or by 33 percent). All other aspects of the ML regulations (such as the associated transfer payments) remained unaffected by the reform. Our estimation strategy exploits that the eligibilityfor the extended leave was determined by a cutoff due date. This gives rise to a fuzzy regressiondiscontinuity design (RDD), which we translate into an instrumental variable (IV) approach.This provides us with a local average treatment effect (LATE) that identifies the causal effect ofan extended prenatal ML duration due to being assigned to the new regulations.Our research design has a number of interesting features. First, since our IV reflects a policychange, our estimated LATE is equivalent to a policy-relevant treatment effect (Heckman andVytlacil, 2001). This is a well-defined parameter answering a policy-relevant question. Second, in our research design assigned and not assigned mothers, while having different prenatalML durations, were both entitled to the same postnatal ML duration and the same parentalleave. This allows us to cleanly identify the effect of variation in prenatal ML, not only onbirth outcomes, but also on post-birth outcomes. Third, the timing of the reform enables usto study its effects on children and mothers in the long-run. This is important, since the fetalorigins hypothesis stresses that (health) effects of prenatal events may remain latent for manyyears (Almond and Currie, 2011a,b). Fourth, to check the robustness of our results, we canadditionally use information on unaffected non-working mothers, who are not eligible for ML.1The leave that often follows ML and allows one or both parents to remain home to care for young childrenis usually called parental leave (see OECD Family database, “Child-related leave: PF2.1 Key characteristics ofparental leave systems,” updated: March, 2017). We follow this semantic convention throughout the paper.2Currently, 32 states have ratified the Maternity Protection Convention issued by the International LabourOrganization (ILO), which mandates among others at least 14 weeks of ML and an entitlement to cash and medicalbenefits.3In contrast, the effect of maternal employment after childbirth and during first years of a child’s life is extensively studied. In particular, there are a number of design-based papers on the effect of different postnatal maternityand parental leave durations on child outcomes available (Liu and Skans, 2010; Baker and Milligan, 2010; Rasmussen, 2010; Baker and Milligan, 2015; Dustmann and Schönberg, 2012; Carneiro et al., 2015; Dahl et al., 2016;Danzer et al., 2017).2
This second source of exogenous variation extends our RDD with a difference-in-differences(DiD) approach. The DiD component differences out potential seasonal effects and accountsfor any unobserved characteristics that follow a seasonal pattern between children born in different months. Thus, the combination of these two sources of exogenous variation ensures aclean identification of treatment effects. Fifth, we can rely on high-quality administrative datasources covering the universe of all births in Austria. The Austrian Social Security Database(ASSD) provides information on the mother’s eligibility for ML, her actual leave duration, andher return to work behavior. The Austrian Birth Register comprises a number of outcomes to assess children’s health at birth, and enables us to closely track subsequent maternal fertility. TheASSD further allows to assess children’s long-term human capital outcomes (up to 40 years ofage) and maternal mortality. For a subsample of observations, we also have data on long-termhealth outcomes (i.e, health care utilization between 25 and 40 years of age). Sixth, the institutional setting promotes a clear interpretation of our results. Our LATE captures the reduction ofin utero exposure to maternal stress caused by work in the 33rd and 34th week of gestation for agroup of mothers without major problems in this stage of pregnancy. We consider this estimateto be informative not only for the Austrian case, but also for designing prenatal ML policies inother places, such as the United States.There are several potential mechanisms through which extended prenatal ML could improvethe health of pregnant workers and their unborn children. First, the extended job-protectionand the absence from work should reduce the mother’s psychological and physiological stresslevel. Certain groups of workers could also benefit from a reduction in specific occupationalexposures.4 Thus, for women whose counterfactual home environment is healthier than theirjob environment, an extended prenatal ML has the highest potential payoff.5 In our researchdesign, we can abstract from self-selection into ML with respect to the relative quality of thework versus home environment, since ML is mandatory. Finally, the modified allocation of time(i.e., substituting work with leisure) may also lead to healthier behavior. Expecting mothers mayhave more time to rest, to follow a healthy diet, or to do all necessary prenatal check-ups.The existing literature provides evidence for the importance of these mechanisms. Thefetal origins hypothesis and supporting empirical evidence emphasize a number of factors inthe prenatal environment that are important for later child and adult outcomes (Almond andCurrie, 2011a,b). Maternal stress is one important factor. Most studies distinguish the effects ofprenatal stress by pregnancy trimester of exposure. The reform we consider in this paper has thepotential to reduce maternal stress in the third trimester (more specifically in the weeks 33 and34). Multiple studies provide evidence that prenatal stress has adverse effects for birth outcomes4Examples are second-hand tobacco smoke in the hospitality industry (Bharadwaj et al., 2014), chemicals incertain branches of manufacturing (Chen et al., 2000; Snijder et al., 2012), anaesthetic gases and antineoplasticdrugs in the medical sector (Lawson et al., 2012), low levels of radiation in the aviation industry, or shift work(Bonzini et al., 2011) and noise.5At the same time, it cannot be ruled out that the counterfactual home environment is less beneficial for somewomen. In this case, an increase in prenatal ML may have even negative effects.3
throughout pregnancy. For instance, Black et al. (2016) find negative effects of stress inducedby the death of the mother’s parent during pregnancy on birth outcomes with similar effectsacross all trimesters of exposure.6 Persson and Rossin-Slater (2018), studying an equivalenttreatment with a focus on long-run mental health outcomes, confirm this pattern. Based on thesefindings we consider reduced stress in the third trimester as one important causal channel of ourtreatment. Regarding healthier behavior during pregnancy, a large number of factors (such asnutrition and physical activity) are discussed. While causal evidence is lacking for some of thesedeterminants, the importance of prenatal checkups is documented in design-based studies. Forexample, Evans and Lien (2005) exploit a 1992 bus strike in Pennsylvania, which led to a sharpdecline in prenatal care visits among women pregnant at that time. They conclude that prenatalcheckups reduce maternal smoking and enhance birth weight.7To our surprise, we find no evidence for an impact of the prenatal ML extension on children’shealth at birth. The estimated treatment effects are statistically insignificant and precisely estimated zero effects. This finding is consistent across subsamples of mothers who are expected tobe more vulnerable (such as blue-collar workers or older mothers). In line with this zero effecton children’s health outcomes in the short-run, we also do not find any evidence for significanteffects on long-run health and labor market outcomes. Treated and untreated children have statistically indistinguishable labor market and health outcomes up to the age of 40. Thus, there isalso no evidence for latent effects that manifest later in life. Our analysis of subsequent maternal fertility neither reveals any significant effects of the reform. Treated and untreated mothersdo not significantly differ in the timing of subsequent births or in their completed fertility. Thesame holds true for their 20 and 40 year survival rates. We therefore conclude that the reformhad no measurable effects on children and mothers.The political justification for this reform was to improve the health of pregnant workers andtheir children. Our evaluation provides no evidence for any impact of the extension from 6 to 8weeks of prenatal ML. In contrast, the reform has clear cost. It has increased public spending ontransfer payments by one-third and additional cost for firms cannot be ruled out. Importantly,some women may prefer to work during this period, but are not allowed to. While our resultsmust be interpreted within the scope of the Austrian setting, we conclude more generally thatmandatory prenatal ML starting in the 35th week of gestation is sufficient for pregnant workerswithout problems in pregnancy. It should be emphasized that we do not interpret our results as ageneral argument against (mandatory) prenatal ML. Quite the contrary, we consider our findingto be valuable for designing an optimal prenatal ML policy.86This finding is consistent with previous studies on the effects of prenatal exposure to stressful events such asarmed conflicts (Mansour and Rees, 2012) or hurricanes (Currie and Rossin-Slater, 2013). Earlier papers usingterrorist attacks landmine explosions (Camacho, 2008) and a large earthquake (Torche, 2011) find the strongesteffects in the first trimester.7Sonchak (2015) finds similar effects of prenatal care on birth weight for disadvantaged white mothers.8To provide some evidence for the external validity of our findings, we complement our micro-analysis with across-country study. Applying a DiD approach, we exploit the variation in prenatal ML duration across 17 OECDcountries over time. We find no evidence for an impact of a longer duration of prenatal ML.4
Our findings add to the scarce stock of empirical evidence on this topic. So far, only ahandful of design-based papers provide evidence on the effects of prenatal ML.9 With regardsto the U.S., there are two studies available. Rossin (2011) evaluates the effects of twelve weeksunpaid ML introduced by the The Family Medical Leave Act (FMLA) in 1993. This policyallowed mothers to take a leave during their pregnancy and/or after childbirth. The author’sidentification is based on variation in FMLA policies across states and variation in firm coverage. She finds that unpaid ML led to small increases in birth weight, decreases in the likelihoodof a premature birth, and substantial decreases in infant mortality. These effects are present onlyfor children of highly educated and married mothers, who were most able to take advantage ofunpaid leave. Stearns (2015) evaluates the effect of state-based access to paid ML on healthat birth outcomes. She exploits the fact that five states were required to start providing wagereplacement benefits to pregnant women in the year 1978 through their Temporary DisabilityInsurance (TDI) programs. Eligible women could access this de facto paid ML in the periodimmediately before or after birth. Based on state-level data she implements a difference-indifferences approach, which suggests that access to six weeks of paid ML lowered rates of lowbirth weight and pre-term births by around 3 and 7 percent, respectively. In contrast to Rossin(2011), the effects were driven by disadvantaged African American and unmarried mothers.Wüst (2015) uses Danish data to study the effect of maternal employment during pregnancy onbirth outcomes. She focuses on the pregnancy weeks 12 and 30. To account for selection intoemployment she exploits variation across pregnancies and compares outcomes of mothers’ consecutive children. She finds that mothers, who are employed (in either week 12 or 30) are lesslikely to have a preterm birth. As a potential explanation for this finding she discusses maternalstress caused by not working.The remainder of the paper is organized as follows: In Section II, we present our researchdesign. We first provide details on the ML system, the reform in the year 1974, and otherrelevant aspects of the institutional setting. We describe our data sources and present our estimation strategy. In Section III, we discuss the estimation results along with a number of robustness checks. In Section IV, we briefly discuss complementary evidence from a cross-countryanalysis. Section V concludes the paper and discusses potential policy implications.II. Research designII.1. Institutional backgroundIn this section, we summarize the institutional background and describe the ML system beforeand after the 1974 reform. To enhance the understanding of the context we first provide information on female labor force participation rates. Finally, we describe changes in the publicprenatal care program over time.9The evidence from observational studies on the effects of working conditions on pregnancy outcomes is summarized by two meta-analyses (Mozurkewich et al., 1999; Palmer et al., 2013).5
II.1.1. Female labor force participationThroughout the 1970s labor force participation rates remained quite constant. Among womenbetween 15 and 60 years of age the rate was around 55 percent. The equivalent male rateamounted to roughly 85 percent. The highest female participation rate among all age groupsin 1971 was 62.4 percent for those aged 20 to 29 (Butschek, 1974). Our estimation sample isdominated by this age-group, which accounts for about 66 percent of our sample. In comparison, the rate for women aged 30 to 39 was only 50.9 percent (Butschek, 1974). This significantreduction was due to women leaving the labor force when they married or had their first child.II.1.2. Maternity leave system and its reform in 1974In 1957, Austria introduced a legislation which mandated 12 weeks of paid job-protected ML.This prohibited pregnant women from working 6 weeks before and 6 weeks after birth. Thebeginning of the prenatal leave was determined based on the doctor’s estimation of the date ofdelivery. The prenatal leave could be started earlier if the mother’s or the child’s health wasat risk due to the work environment. The latter had to be certified by either the chief medicalofficer of the Regional Health Insurance Fund or by an occupational physician of the LabourInspectorate. Postnatal leave was regularly extended for all nursing mothers to 8 weeks and fornursing mothers with premature births to 12 weeks.10The last major reform of the ML system took place in 1974, which extended the compulsoryML duration to 16 weeks. Since then pregnant women are prohibited from working 8 weeksbefore the delivery and usually 8 weeks after the delivery. Eligibility for the extended MLwas determined by the expected due date. Pregnant women with an expected due date untilApril 1974 were still covered by the old regime and assigned to 6 weeks of prenatal leave.Mothers who expected to give birth on June 1, 1974 were the first to be covered by the fullimplementation of the reform and were assigned to 8 weeks of prenatal leave. Mothers whoseexpected date was in May 1974 were phased stepwise into the program.The upper Panel of Figure 1 depicts the relationship between assignment to the reform andthe actual length of the prenatal ML. We use the actual birth date as a proxy for the expecteddue date, since we cannot observe the latter. The figure plots the average prenatal leave durationby birth date. Until the end of April we observe a constant mean of about 6.3 weeks (or 44.2days). Throughout May we see a steady increase in the average prenatal leave duration, whichreflects the stepwise increase as specified by the reform. Starting from June, when the reformstarts to be in full effect, we observe an average prenatal leave duration of about 8.1 weeks (or56.6 days). In our estimation analysis below we will focus on children born in April and June,which represent the groups of ‘not assigned’ (N) and ‘assigned’ (A) mothers, respectively. Wedisregard mothers who gave birth in May. Thus, we focus on the jump in the average prenatalML duration from 6.3 to 8.1 weeks.10Since 1962, all mothers experiencing a premature birth were eligible for 12 weeks postnat
the time of childbirth and should be distinguished from parental leave.1 There is considerable variation in the ML arrangements across countries in terms of income support, obligation, and pre- and postnatal durations. 2 In this paper, we are interested in prenatal ML.
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