Macroeconomic Effects of Maternity Leave Legislation in Emerging Economies

Abstract

This study evaluates the relationships between maternity leave duration, female and male labor force participation, and aggregate productivity in emerging countries. We build a comprehensive maternity leave data set for a panel of emerging countries at annual frequency, augmenting publicly available data on maternity leave with narrative evidence that identifies the exact dates when legislative changes to maternity leave policies were enacted and enforced. Maternity leave is associated with positive but limited effects on female labor force participation, but it is associated with significant increases in male labor force participation. There is some evidence that increases in maternity leave duration are associated with decreases in productivity in the short run, primarily driven by the duration channel where long leave leads to temporary declines in productivity, but there are no significant adverse effects at longer horizons.

Keywords: labor force participation, female labor force participation, maternity leave

JEL Classification: J11, J08, J16, E24