Macroeconomic Effects of Maternity Leave Legislation in Emerging Economies

Abstract

This study evaluates the effects of maternity leave duration on female and male labor force participation and on macroeconomic productivity in emerging countries. We build a comprehensive maternity leave data set for a panel of emerging countries at annual frequency that augments 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. The higher data frequency allows us to study both the short-term and the intermediate-term effects of maternity leave duration. Maternity leave has positive but limited effects on female labor force participation, but it significantly increases male labor force participation. There is some evidence that increases in maternity leave duration decrease productivity in the short run, but there are no significant adverse effects at longer horizons. We also find evidence of substitutability between male and female workers. The results for emerging countries look substantially different when compared to the results for a panel of developed countries.