The Effect of Changes in Maternity Leave Legislation on Women's Employment and Earnings in the U.K.

Anita Gundanna, Columbia University
Ipshita Pal, Columbia University

This paper uses cross-sectional data from the UK's General Household Survey from 1991 - 1996 to explore the changes in wages and employment status of new mothers ("takers") and of women of childbearing age ("potential takers") due to changes in maternal leave legislation in 1994. These changes included an increase in the amount and expansion in the accessibility of paid leave to pregnant women and new mothers. Through a difference-in-difference analysis we assess changes in wages and employment, before and after the policy change. We find that the wages decrease with the policy change, although this finding is not statistically significant. We also find positive effects of the policy change on employment status of both new mothers and women of childbearing age. This suggests a possible causal relationship between improvements in maternity leave policy (increased access and benefits) and increased rates of employment of women.