Reviewing the Research on National Maternity Leave Policies and their Effects on Women’s Careers, Children’s Health, and Employers’ Bottom Line

In 2015, women surpassed men in their likelihood of holding a bachelor’s degree. The gender pay gap has been steadily closing since 1973 but remains persistent. One potential avenue for reducing this gap is further support for women with children, particularly in the form of maternity leave. To provide perspective on the current research on paid maternity leave and its affect on women’s employment, Maya Rossin-Slater conducted a literature review summarizing the studies on maternity leave since 1998. Rossin-Slater breaks down the literature into the effect of maternity policies on women’s careers, children’s health, and employers’ costs and turnover rates.

Before analyzing studies from Western Europe and the United States, Rossin-Slater provides context on the prevalence of leave policies across 185 countries. 98 of those countries offer more than 14 weeks of paid or unpaid leave. 61 countries offer policies paying one hundred percent of the mother’s wage. The United States is thus an outlier, offering only twelve weeks of unpaid, job-protected maternity leave under the Family and Medical Leave Act (FMLA) of 1993. Six U.S. states offer paid leave for six weeks.

Citing nine different studies, Rossin-Slater found offering maternity leave almost invariably increases the length of leave mothers take following the birth of a child. Han et al (2009) found that mothers took 20 percent more leave during the second month after birth once the FMLA leave policy was enacted. Rossin-Slater et al. (2013) found California’s creation of its mandatory paid leave policy in 2004 doubled the number of mothers taking leave. Most significantly, this effect was concentrated on low-educated, unmarried mothers, suggesting the importance of paid leave for equalizing opportunities among different income groups.

The effects of maternity leave on women’s employment prospects is mixed. Evidence from Baum (2003) and Rossin-Slater (2013) show that paid leave policies of less than one year increase women’s likelihood of returning to employment after the birth of a child and does not diminish women’s medium and long-run employment and earnings. However, Rossin-Slater cites seven international studies demonstrating that paid leave beyond one year does affect women’s long-term wages, although she does not quantify their effects.

Policies that protect a woman’s right to return to her job, but do not provide payment during her leave, can have effects independent of paid leave. Stearns (2016) finds that job protection alone increased maternal employment rates and job tenure for five years after giving birth, but this came at the cost of career success. The policy was correlated with fewer female promotions to managerial positions. In the end, Rossin-Slater concluded that paid maternity policies of less than one year increase women’s ability to return to the workforce, but beyond one year, hurt women’s career prospects.

The introduction of paid leave impacts children’s health positively, but extending maternity leave beyond 12-14 weeks has little effect. The author cites three studies from France, Austria, and Germany where leave was extended from about 12 weeks to between 6 months and 36 months, depending on the study. Each study found the extensions did not increase children’s health or long-term educational outcomes.

After Norway introduced four months paid leave, a Norwegian study examined the effects and found it lowered high school dropout rates by two percentage points and raised median earnings of children at age 30 by five percent. The introduction of the U.S.’s unpaid FMLA policy in 1993 also showed health improvement for infants, particularly for poor and minority children. Thus, introducing, but not lengthening, paid maternity leave is seen to improve children’s health.

Lastly, Rossin-Slater examines the impact of maternity leave policies on employers and firms. Evidence from three different studies executing large surveys of businesses in California find that the state’s paid leave policy increased morale and productivity without raising costs. Surveys done in New Jersey, a state with its own policy of six-weeks paid leave, found that businesses did not have lower profitability or employee productivity following the implementation of paid family leave. Two non-peer reviewed studies in New England and California examined firms in states that implemented similar six-week paid leave policies and found no impact on employee productivity, costs, or turnover.

The paper concludes that maternity leave up to one year improves children’s health without hurting women’s career prospects. Mothers’ ability to take advantage of leave policies, mothers’ ability to return to work, and children’s infant health are especially helped by paid maternity policies. This evidence suggests that the U.S., which does not have national paid maternity leave, should strongly consider implementing a paid leave policy to promote the health of children and families, and support women’s career advancement.

Article source: Rossin-Slater, Maya. “Maternity and Family Leave Policy.” National Bureau of Economic Research, No. w23069, (2017).

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