Local Parental Leave Assistance and Long-Term Effects on Female Labor Supply

  • Mota N
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Abstract

Childbearing and rearing contributes to women experiencing greater working career interruptions than men, impacting future employment outcomes. I use New Jersey’s 2009 mandate requiring firms to provide workers paid leave during their child’s first year of life to assess how it affects subsequent employment. A spatial differencing method is carried out using American Community Survey from 2005 to 2012. The method compares difference-in-differences estimates of how the policy impacts potentially eligible women’s employment in New Jersey to those same estimates for women living further away from New Jersey. A woman is deemed potentially eligible if she had a child in 2009 or later. This differencing strategy allied to the use of state by year fixed effects seeks to capture heterogeneity in local economic conditions that may bias estimated policy impacts. I find the policy increases married women’s employment probability by approximately 3 percentage points in the year of potential leave take-up and this effect persists in the three subsequent years. No significant policy effects on employment are found for men or single women.

Author-supplied keywords

  • border analysis
  • j22
  • jel classification
  • labor force participation
  • maternity leave
  • r23
  • women

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Authors

  • Nuno Mota

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