Abstract
This paper examines the effect of the introduction of a 1982 maternity benefit program on childbearing, employment and marital stability in the former Soviet republics of Estonia, Latvia and Lithuania. The program included one year of partially paid leave and a small cash payment at birth. We use individual-level panel data on birth, employment and marital status histories and a difference-in-differences strategy to study the short- and long-term effects of the program. First, we find an increase in fertility rates, particularly for second births among married and older women, providing suggestive evidence of an increase in completed fertility. Second, we find an increase in overall female employment, likely due to the desire to qualify for benefits. Third, we find an increase in the length of maternity leave and in job continuity, but no effect on employment one to five years after the birth of a child. Finally, we find increased marital stability for married couples after the birth of a child. Our setting enables us to examine the effect of family policies in a region with patriarchal gender norms with respect to housework, where women were the main providers of care within the household, but egalitarian gender norms with respect to the labor market, where most women participated in the labor market full-time. Patriarchal gender norms regarding housework may explain the increase in marital stability: as maternity leave allows women to stay home with their young children longer, the conflict between women’s dual roles as full-time worker and full-time mother is reduced, which may reduce conflicts within the marriage