The Effects of Paid Maternity Leave: Evidence from Temporary Disability Insurance

This paper investigates the effects of a large-scale paid maternity leave program on birth outcomes in the United States. In 1978, states with Temporary Disability Insurance (TDI) programs were required to start providing wage replacement benefits to pregnant women, substantially increasing access to antenatal and postnatal paid leave for working mothers. Using natality data, I find that TDI paid maternity leave reduces the share of low birth weight births by 3.2 percent, and the estimated treatment-on-the-treated effect is over 10 percent. It also decreases the likelihood of early term birth by 6.6 percent. Paid maternity leave has particularly large impacts on the children of unmarried and black mothers.