Does introducing a national paid parental leave scheme improve maternal mental health?

While maternal health is an objective often targeted by parental leave policies, empirical research on this area is limited, and subject to various methodological limitations. However, the health of employed mothers is important, as it has implications not only for the wellbeing of mother and child, but also wider ranging potential impacts on labour and health care markets. In this study, we evaluate the impact of the introduction of Australia’s national Paid Parental Leave (PPL) scheme on maternal mental health outcomes. Effects on a rich set of SF-36 based mental health measures are analysed including continuous scores, threshold-based depression severity and categorical measures for specific mental health items. We perform ordinary least squares and ordered logit estimation on a sample of 1,555 births to PPL-eligible, coupled women (768 pre-reform and 787 post-reform) over 2004 to 2016 from the Household, Income and Labour Dynamics in Australia (HILDA) survey. We find the PPL significantly improved maternal mental health across a range of indicators. The effects are primarily from significant mental health improvements for first-time mothers and eligible women with pre-existing paid and unpaid leave entitlements. Therefore, we find the PPL did not improve health equity as health benefits were unequally distributed. We suggest the need to revisit the generosity of the scheme, to investigate the extent to which other eligible women (including those relatively more disadvantaged) would be able to benefit from potential mental health gains.