Paid Maternity Leave and Female Wage Rate: An Empirical Study Based on the Provincial Late-Birth Maternity Leave Awarding Policies

Abstract

Abstract: By making use of the provincial late-birth maternity leave awarding policies after 1988 to construct instrumental variables, this paper empirically examines the causal relationship between paid maternity leave duration and female wage rate. The findings show that the paid maternity leave in China has significant differences before and after 1997, both the coverage rate and the average leave duration decreased dramatically after 1997. The intensifying competition in the labor market and the increasing non-public economic sectors brought about by marketization reform and economic transition have weakened the protection of paid maternity leave to female labors. The coverage rate and duration of paid maternity leave of female labors that have not received higher education or are not working in the governmental or public institutions but working in private sectors are much lower than those who have received higher education and are working in governmental or public institutions or state-owned enterprises. This phenomenon became much more significant after 1997. The paid maternity leave has significantly negative effects on the wage rate of female labors, and this effect still exists even the endogeneity and the sample selection bias are under control. An increase of one day of the paid maternity leave would reduce female wage rate by 2%, this effect is more significant since 1997. Such negative impact is especially obvious on the less educated females.

Key words: paid maternity leave, wage rate, late-birth maternity leave awarding

JIA Nan, YANG Tianchi. Paid Maternity Leave and Female Wage Rate: An Empirical Study Based on the Provincial Late-Birth Maternity Leave Awarding Policies[J]. JOURNAL OF CONTEMPORARY FINANCE AND ECONOMICS, 2020, 0(1): 19-34.

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