We investigate the effects of maternity leave coverage on women’s post-birth wages, job
tenure, and labor market attachment. We pay particular attention to unobservable
characteristics that are correlated with maternity leave coverage and that affect labor market
outcomes. We use a control sample, as well as a range of control variables, to address
unobserved heterogeneity. We find evidence of substantial selection based on unobserved
heterogeneity. Maternity leave effects on the three outcomes are found to be small and shortlived.
This finding is understandable given that most policies in the United States allow leaves
for only 12 weeks at most.
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