Simon Burgess, Paul Gregg, Carol Propper, Elizabeth Washbrook and the ALSPAC Study Team
In this paper we use the ALSPAC cohort of 12,000 births to examine the effect of maternity rights on mothers' post-birth return to employment decisions. We aim to disentangle the effects of the terms of maternity rights entitlements from the effects of other factors (such as household wealth, personal preferences and labour market opportunities) that influence the timing of a mother's return to work. We adopt a discrete hazard model with instrumental variables to estimate a counterfactual of what mothers with rights would have done in the absence of this legislation. Mothers with rights have an underlying (but unobserved) stronger attachment to the labour market which prompts earlier return than on average. Nevertheless, even when we take this into account we find a substantial impact of maternity rights on behaviour. Having rights induces around 20 per cent more women to return to their previous job before 7 months than would otherwise be the case. Women from lower skilled groups return disproportionately at the date at which maternity pay expires, while managerial and professional women tend to return at the expiry of unpaid leave.