“Self-Employed Mothers: Child Penalties, Maternity Benefits, and Family Health” (paper)

coauthors  Fabrizio Core, ESE Rotterdam.

Discussed by: Elena Simintzi (UNC)
Abstract

We study the effects of motherhood on self-employed women’s business activity, and the moderating role of maternity benefits. Using rich administrative data from the Netherlands, we first document that childbirth reduces the business revenue of self-employed women by about 50% in the quarter of birth and 25% subsequently. We then study the introduction of a flat-rate maternity cash benefit for the self-employed. Exploiting variation in benefit eligibility by birth month, we estimate that mothers eligible for the benefit further reduce their business revenue and income in the first two years after childbirth. The decrease in business income amounts to approximately half of the benefit amount, leading to an overall increase in household income. Eligible mothers likely spend more time with their child, as the use of formal daycare is significantly reduced. Lastly, we assess the effects of benefit eligibility on the well-being of mothers and their children. While we find no impact on household composition or maternal health, the benefit does reduce health expenditures and medicine use among children in their first year after birth, although not in the long run.

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