Panel Paper: Maternal Employment Around Childbirth - Evidence from Welfare Work Requirements

Thursday, November 6, 2014 : 10:35 AM
Santa Ana (Convention Center)

*Names in bold indicate Presenter

Jiyoon Kim, University of Michigan
Beginning in 1996, welfare recipients were required to work to receive benefits. However, one out of three was waived from work requirements in the months surrounding childbirth. The goal of this paper is to quantify effects of welfare work exemptions on women’s work before and after childbirth. I study two exemption policies that account for 90 percent of all exemption cases: the pregnancy exemption and the age of youngest child (AYC) exemption. The analysis of these two exemptions enables me to capture women’s responses for both sides of childbirth. I exploit considerable variation in the length of exemptions across states and years to estimate a triple-difference in the event-study. I find sizable increase in labor force participation in states with tighter exemptions. Since labor force participation conflates employment and unemployment, I decompose the aggregate pattern and reveal an opposite story: no pregnancy exemption increases employment, whereas short AYC exemption raises unemployment. Welfare receipt trend also markedly differs across two policies. Mothers with no pregnancy exemption significantly lowered welfare dependency after childbirth. In contrast, strict AYC exemption resulted in more reliance on welfare. This finding suggests that the timing of mandatory work matters substantially to mothers, who face different costs of working before and after childbirth.

Full Paper: