Bargaining over maternity pay: Evidence from UK universities

Abstract

The generosity of maternity pay has been shown to be an important factor for mothers' attachment to the labour market. In the UK, we can observe that the generosity of maternity leaves across universities varies greatly: some universities top up the statutory maternity pay with longer and better paid leaves, others are either less generous or only entitle academic women to the legal minimum. We want to understand why this is the case. Therefore, this article examines both theoretically and empirically how higher education employers decide about the generosity of the offered occupational maternity pay. We use a bargaining approach to model the supply and demand side of generous maternity benefits in universities with different characteristics and test the implications with a generalised negative binomial model. We find that universities' income does not account for this variation while differences in terms of costs and benefits for employers do. Most importantly, our results show that more research intense universities with a higher previous share of female professors provide more generous maternity pay. We offer a range of explanations for these findings.