Syrone David 5900144029

Labour economics HW 1

1) What are maternity benefits

They are benefits related to childbearing and caring. Some examples include
childbearing insurance coverage, paid maternity leave, childcare subsidies, cash
handouts or tax rebates upon having a child.
2) What is a mandate
In this context, it is a law that employers have to comply to with regards on
compulsory benefits which they have to provide about to be or current mothers
3) What does the author mean by a benefit tax
A benefit tax is when the recipient accepts lower income in place of a benefit
that he/she values. The value placed on benefit reduces the deadweight lost and
even eliminates it if the deadweight and benefit are of equal value. The
deadweight loss is reduced if the intended recipients are incentivised into
working and therefore, increasing labour supply. In contrast, a blanket tax means
lower income for the individual without necessarily receiving any benefits of
value.
4) What is the question the author is trying to answer
The author is trying to find the efficiency (the amount of deadweight loss) of
mandated employer-provided maternity benefits. This is dependent on the
effects on wages and labour participation of women. Lower deadweight loss of
mandates is based on how freely the wages of the specific group are able to be
adjusted and how much they are incentivised to increase their labour supply. The
author is seeking to measure these effects.
5) Theoretically, an employer who is mandated by the government to provide
an additional benefit to all workers can pass the cost of this mandated
benefit to all workers in the form of lower wages. Why is it difficult for the
costs of mandated benefits for a specific group (i.e) women to be passed
on to that group in the same way
It is difficult due to barriers in freely adjusting wages of specific groups of people.
For example, mandated maternity leave translate to higher cost of hiring women
but the employers would face barriers to reduce the wages of women as
compared to man due to laws that protect against workplace discrimination of
women. In addition, if the intended group is already earning or close to earning
the minimum wage, there is little or no scope to adjust the wages down
6) Describe the best you can how the author uses state and federal laws to
identify the effect of group-specific mandates on wages and labour force
participation
Using the states that passed laws to make childbirth coverage mandatory in
1975-1978, after controlling for year and state and state-year effect, she

measured the changes of wages and labour participation of those having or at

risk of having a child and those whose health insurance covers someone like
that in comparison to those who will be unaffected by the new law(control
group). Then she compares the differences in the aforementioned states to the
differences in the states where no such laws were mandated. Similarly, for the
federal laws, but the experimental states were the ones without the childbearing
coverage laws yet
7) What was the effect of mandated employer-provided maternity benefits on
wages of women?
For married women aged 20-40, wages decreased
8) What was the effect of mandated employer-provided maternity benefits on
the labour force participation of women?
For the same demographic, hours worked per week increased but employment
decrease, resulting in a smaller, almost none, net overall labour input effect
9) How do you think employers effectively pass the cost of mandated
employer-provided maternity benefits through lower wages if the US has
strict laws against gender-based wage discrimination?
The author employers effectively lower cost per hour of hiring by increasing
number of hours worked and decreasing employment.
10)
Does Thailand (or your home country) have mandated employerprovided maternity benefits for women? If so, what are the benefits?
In the face of ultra-low fertility rates, Singapore has in place the marriage and
parenthood package. Part of this package includes employer-provided maternity
benefits. It should be noted however, Singapore emphasises on parenthood
within the marriage context, meaning that unwed single mothers do have
received the full benefits of the package.
Paid maternity leave is partly paid by the employer for the first 8 (out of 16)
weeks and only for the first 2 births. The employee has to have been working
there for 3 continuous months
In Singapore much of the healthcare aspect is cover by the employees central
provident fund (CPF), a mandatory retirement saving scheme. Each month, the
employers have to contribute to their employees CPF. Contribution rates vary
from period to period and can be found on the governments CPF website.
Then, the government has in place schemes that allow withdrawal from the CPF
with regards to childbirth and caring, including insurance and hospital bills.