The Effect of Changes in Maternity Leave Policy on Labor Market Outcomes for Females in Brazil

• Main Author: Bastos de Malafaia, Viviane Maria
• Format: Others
• Published: Digital Archive @ GSU 2009
• Subjects: Brazil; maternity leave; Economics
• Online Access: http://digitalarchive.gsu.edu/econ_diss/35; http://digitalarchive.gsu.edu/cgi/viewcontent.cgi?article=1034&context=econ_diss

Maternity leave policy has changed a few times over the last 20 years in Brazil. This dissertation investigates how a ceiling imposed on the maternity leave benefit paid by Brazilian Social Security in Dec, 1998 and its temporary suspension in May, 1999 affected females' employment and earnings using difference-in-difference method. We apply the difference-in-difference method to examine whether the changes in maternity leave policy negatively affected females in the labor market. Our analysis uses four treatment groups: 1) young females, aged 20 to 40 years; 2) young females working in the private sector; 3) older females, aged 41 to 65 years, working in the private sector; and 4) young females with infants. Young females were selected based on the fact that they have a higher probability of giving birth compared to older females and, consequently, using the maternity leave benefit. The second and third groups were supposedly the groups directly reached by these changes in maternity leave policy since earnings and employment in the public sector should not be based on an individual's gender and therefore discrimination may be absent or less prevalent there than in the private sector. We also include young females with infants as a treatment group since employers may use this information to infer the probability of a female having another child. We also propose four control groups: 1) older females aged between 41 and 65 years; 2) young females working in the public sector; 3) older females working in the public sector; and 4) young males. Overall, our results show that the limit imposed on maternity leave benefits paid by Social Security and the transfer of the responsibility of paying the remaining wages to employers negatively affected females' hourly wages, and this negative effect seems to have persisted even while the limit was temporarily suspended. Furthermore, young females were more affected by the change in policy than older females. These results lead us to think that these changes in maternity leave policy may have slowed the convergence of females' wages toward males' wages or "forced" females to swim upstream during the period from May 1999 to March 2003.