The labor market consequences of maternity leave policies: evidence from Brazil

Abstract

This paper examines the labor market consequences of paid maternity leave for women who participate in the Brazilian formal labor market (and thus qualify for the leave policy). We take advantage of rich administrative data and follow women 47 months before and after leave-taking. Using an event study approach, we find an inverted Ushape employment pattern, which peaks at the first month of leave-taking. Employment is stable until the fourth month, indicating compliance with the legislation, but drops sharply after the job protection period and stabilizes again at around one year. Almost half of the women are out of the formal labor market 47 months after the leave. As most employment effects are due to separations that occur from employer's initiative, our results suggest that further policies are needed to promote higher attachment of women in the labor market, especially for the less educated workers. We also restrict our analysis to firms that have extended the leave period by combining the event study analysis with a di erence-in-di erence strategy. We nd that the extended leave policy alleviates part of the negative employment effects of maternity leave-taking.