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Labor force exit decisions of new mothers

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Abstract

Using unique administrative data from the state of Georgia, this paper investigates women’s decisions to exit the labor market upon the birth of a child. Exits rates and their changes over time varies dramatically between married and single women giving birth. Only the pattern among single, less educated women can be considered consistent with changing labor force participation rates of women over the period of analysis. Potential policy implications of these changes are discussed.

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Notes

  1. Marital status is self-reported, so it is possible that a woman who is cohabiting would consider herself married and thus report herself as such.

  2. White et al. (1990) provide an extensive discussion about the use of these employment data, commonly referred to as the Quarterly Census of Employment and Wages (QCEW), or ES-202 data.

  3. Included in earnings are pay for vacation and other paid leave, bonuses, stock options, tips, the cash value of meals and lodging, and in some states, contributions to deferred compensation plans (such as 401(k) plans). Covered employer contributions for old-age, survivors, and disability insurance (OASDI), health insurance, unemployment insurance, workers' compensation, and private pension and welfare funds are not reported as wages. Employee contributions for the same purposes, however, as well as money withheld for income taxes, union dues, and so forth, are reported even though they are deducted from the worker's gross pay.

  4. For example, if a woman gave birth in Quarter 4 of 2000 the pre-birth labor force status would be based on Quarter 4 of 1999 and the first three quarters of 2000, and the exit decision would be based on her labor market status in Quarter 2 of 2001. While the overall incidence of exit varies based on when an exit is defined, the pattern of exit rates over time and conclusions from the analysis are unaffected by when exit is defined (from two to five quarters from birth).

  5. As the employment data is limited to employment information for the State of Georgia, individuals who moved to Georgia in the 3 years prior to birth could have lower levels of labor market experience recorded than was actually incurred. Job tenure holds a special place in the analysis as it is expected to help proxy for the availability of maternity benefits, which may affect the exit decision, and it may also be related to whether a woman is expecting to return to the same employer post-absence. Considerations surrounding the return-to-work decision are the subject of a separate paper.

  6. Job loss, job creation and the turnover rate are the average of the four quarters preceding the exit decision.

  7. The amount of prenatal care may also reflect the presence of health insurance.

  8. All public agencies and all private-sector employers of 50 or more workers for 20 weeks in the current or preceeding calendar year are covered by the FMLA.

  9. Details of state legislation is obtained from "State Family and Medical Leave Laws that Differ from the Federal FMLA," from the National Conference of State Legislatures (accessed 18 August 2010) http://www.ncsl.org/Portals/1/documents/employ/fam-medleave.pdf.

  10. Selden et al. (2004) show that after declining, take-up rates in the U.S. for those eligible for welfare-related Medicaid began increasing in 1998. Although not all states implemented the "separate but equal" status of their own SCHIP programs, it is likely that all states experienced a significant flow from SCHIP application to Medicaid eligibility (see Dubay and Kenney 2009). Also see Bryner (2002).

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Authors and Affiliations

  1. Research Department, Federal Reserve Bank of Atlanta, 1000 Peachtree Street, NE, Atlanta, GA, 30309-4470, USA

    Julie L. Hotchkiss & M. Melinda Pitts

  2. Georgia State University, Atlanta, GA, USA

    Julie L. Hotchkiss

  3. Department of Economics, Andrew Young School of Policy Studies, Georgia State University, Atlanta, GA, 30302-3992, USA

    Mary Beth Walker

Authors
  1. Julie L. Hotchkiss
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  2. M. Melinda Pitts
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  3. Mary Beth Walker
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Correspondence to Julie L. Hotchkiss.

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The opinions expressed in this paper do not necessarily reflect those of the Federal Reserve Bank of Atlanta, nor the Federal Reserve System. The paper has benefited from comments from participants of the University of Colorado Department of Economics seminar series. Thanks to Nicole Baerg, Andy Balthrop, Amy Ellingson, Keyung Wang, and Chunying Xie for excellent assistance.

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Hotchkiss, J.L., Pitts, M.M. & Walker, M.B. Labor force exit decisions of new mothers. Rev Econ Household 9, 397–414 (2011). https://doi.org/10.1007/s11150-010-9114-1

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