Non-Technical Summary:
Improving children’s health is an important public policy issue. Not only is child health important in its own right, as health is a powerful determinant of individuals’ well-being, but an individual’s start in life can also have long-lasting effects into adulthood. Children’s health affects health later in life, and it is also connected with an individual’s cognitive skills. Health can thus ultimately impact on educational outcomes, occupational choices, and future income.
The provision of parental leave schemes may impact on children’s health in mainly three ways. First, the infant gets to spend more time with the mother or father instead of other informal or formal carers. This might have positive or negative effects, depending on whether the mother or father can care for their child better than other carers can. Second, parental leave rights might decrease stress levels of parents, if increased income security and job safety alleviates parent’s worries about their future career or ability to provide for their family. If that is the case, the quality of the time the infant spends with the parents may improve (independent of changes in quantity) with parental leave rights. And third, parental leave rights may facilitate prolonged breastfeeding. Breastfeeding seems to be associated with substantially improved health outcomes, and the World Health Organization recommends breastfeeding as the sole source of nutrition for 6 months.
Providing mothers with access to paid parental leave may thus be an important public policy to improve child and maternal health. Using extensive information from the Australian Longitudinal Study of Children (LSAC), we contribute to the literature by estimating the effect of paid parental leave entitlements on child health at ages one, three, five and seven.
Exploiting detailed information on children’s health, family background, mother’s pre-birth work histories and mother’s health behaviours during pregnancy, we show that paid parental leave entitlements reduce the probability of a child having multiple ongoing health conditions, but do not significantly affect any single condition. Thus, this study implies that the provision of paid parental leave, even for short periods (as usually available in Australia), will benefit children’s health. However, we do not find conclusive evidence that these improvements in health are mediated by any of the three pathways mentioned above.
This study also analyses the heterogeneity of the effects of parental leave rights on children’s health. As outlined above, parental leave rights may impact on child health through both, quantity and quality of the time an infant spends with their parents. The utilisation of paid parental leave rights, and thus its effect on the quantity of time spent with the infant, is likely to vary across education level and income groups. Likewise, the difference in quality between time spent with the parents and with carers other than the parents might depend on parents’ financial resources to buy carer services, and their own parenting skills. We find that the effect on multiple conditions is strongest for children from lower socio-economic backgrounds (i.e. low parental income and education). Typically, voluntary employer-funded paid parental leave is granted to highly educated parents on high incomes. Mandatory government parental leave may, therefore, be most important for the health of children from lower social economic backgrounds.