Inducing Labor: the Impact of Health Insurance on Post-Natal Labor Supply

Abstract

In this paper we analyze the role of access to health insurance plays in the widely documented, sharp fall in mother's labor supply following childbirth. Our analysis exploits variation created by the Affordable Care Act (ACA), which substantially expanded access to health insurance within the U.S., and richly detailed administrative tax data. We find that mother's relative post-childbirth employment increases by 12\% for births that occur after the insurance expansion. This labor supply response is pervasive across mother's pre-birth characteristics, and across the varied impact of the ACA expansion. Our analysis suggests that this response is likely driven by a combination of improved access to maternal health care, increased participation by mothers who do not work before birth, reduced exits among mothers who do work before birth, and a compositional changes in who gives birth following the ACA health insurance expansion.