The effect of paid maternity leave on low-income families' welfare use in the US

Despite the critical role that paid maternity leave can assume in the economic lives of low-income families, research to date has paid insufficient attention to whether paid maternity leave reduces welfare use for low-income families. Using the Current Population Survey (CPS) March Supplement 2007-2014 with the difference-in-difference (DiD) technique, this study finds a significant policy effect of paid maternity leave on reducing the probability of using Temporary Assistance for Needy Families (TANF), TANF benefit amounts and TANF participation length. This study confirms that paid maternity leave is likely to prevent low-income families from using welfare during job interruptions stemming from the birth of a child. Given that TANF is often associated with negative political and social connotations, paid maternity leave can be used as an important social policy to improve economic security as well as offer empowerment in overall social standing for low-income mothers. The discussion focuses on the implications of the findings in a broader context of American welfare states.