Back to work or stay-at-home mother?Maternal employment in FinlandTapio RäsänenResearcher, Kela

Finnish Economic AssociationXXXIX Annual Meeting

In cooperation with:Eva Österbacka, Professor, Åbo Akademi UniversityAnita Haataja, Senior Researcher, KelaMaria Valaste, Senior Researcher, Kela

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Maternal employment in Finland

• Maternal employment is internationally high• Universal child-care system

• Child home care, Private day care, Public day care

Research questionDoes policy affect the duration of mothers’ prolonged child care spells?

We control for− Personal and family characteristics− Previous labor market attachment− Business cycle

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Data & methodology

• 50 % random sample of Finnish mothers giving first birth between 1999 and 2009• Each cohort is followed up until 2013

• Data on• Employment and unemployment spells• Maternity and parental leave spells• Child home care allowance spells• Availability of municipal supplements

• We model return to labor market on• Personal and family characteristics• Previous work experience and labor market activity• Policy, e.g. municipal supplements (and speed premium?)

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Back to work or to employmentLabor market attachment before childbirth

Maximum age difference of 1st and 2nd child is 6 years.Labour market attachment: High >= 22 months, Low < 22 months.

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Employment (re)entry, 1 childActivity before and after first childbirth, cohort 2005

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Employment (re)entry, 2 childrenActivity before and after first and second childbirth, cohort 2005

* Age difference max. 36 months

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Labor market activity before first childbirthLast activity 4 months prior to giving birth

* Other = No labor market activity during last 4 months before giving birth

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Labor market activity before second childbirthLast activity and HCA usage 4 months prior to giving birth

* Other = No labor market activity during last 4 months before giving birth

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Survival analysisWhat affects employment (re)entry?

• Cohorts 2001 to 2009• After childbirth, new mothers are followed until they are right

censored or return to labor market:− at next childbirth, at dissolution or at 36 months (event = 0)− return to labor market (event = 1)

• Problems• PH assumption not valid: baseline hazard varies over time

• We analyze the effect of covariates− with Kaplan-Meier curves− with Cox proportional hazards models− with Piecewise exponential model

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Employment entry or re-entry after childbirthby Mother’s personal income

After first childbirth After second childbirth

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Piecewise exponential hazards modelIs baseline hazard constant between intervals?

• Interval boundaries:• 10.5, 18.5, 24.5, 30.5

• Allow covariates to change between intervals:• Unemployed partner• Region• Municipal unemployment rate• Municipal supplements

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SummaryPreliminary results

• Different individual and family characteristics affect the timing of the return

• Home care allowance postpones the return to the labor market among mothers

• Higher allowances postpones even further• Increase in duration is significant for both employed and unemployed

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Discussion

• Cox proportional hazards model and Piecewise exponential model yield similar results

• Violation of proportional hazard assumption and the piecewise estimation

Thank you!