Kevin Milligan

How Does Job-Protected Maternity Leave Affect Mothers' Employment?

We examine the impact of maternity leaves on the period mothers are away from work postbirth and the likelihood they return to their prebirth employer. We use the introduction and expansion of statutory job‐protected maternity leave entitlements in Canada to identify these effects. We find that modest leave entitlements of 17–18 weeks do not change the amount of time mothers spend away from work. In contrast, longer leaves do have a substantive impact on behavior, leading to more time spent at home. We also find that all entitlements we examined increase job continuity with the prebirth employer.

Evidence from Maternity Leave Expansions of the Impact of Maternal Care on Early Child Development

We study the impact of maternal care on early child development using an expansion in Canadian maternity leave entitlements. Following the leave expansion, mothers who took leave spent 48-58 percent more time not working in their childrens first year of life. This extra maternal care primarily crowded out home-based care by unlicensed nonrelatives and replaced full-time work. Our estimates suggest a weak impact of this increase in maternal care on indicators of child development. For example, measures of temperament and motor and social development show changes that are small and statistically insignificant.

Canadian Inequality: Recent Developments and Policy Options

Les inégalités de revenus ont fait l’objet d’inquiétudes de plus en plus marquées depuis quelque temps dans le monde. Toutefois, le débat s’est fait en des termes très généraux et a surtout porté sur le cas des États-Unis. On ne peut comprendre comment le Canada devrait réagir à cette situation sans présenter des faits et des chiffres clairs. Dans cet article, nous analysons les tendances des inégalités de revenus, et nous examinons en particulier le groupe constitué par le 1 % des citoyens ayant le revenu le plus élevé – celui dont il est le plus souvent question. Nous résumons ensuite les connaissances actuelles sur les causes des inégalités croissantes de revenus, dont la disparité salariale entre les sexes. Enfin, nous décrivons des politiques publiques qui permettraient de réduire ces inégalités – ou à tout le moins d’en ralentir l’aggravation.

The Tale of the Tails: Canadian Income Inequality in the 1980s and 1990s

We present new evidence on levels and trends in after-tax income inequality in Canada between 1980 and 2000. We argue that existing data sources may miss changes in the tails of the income distribution, and that many of the changes in the income distribution have been in the tails. For this reason, we turn to an alternative source. In particular, we construct data on after-tax and transfer income using Census files augmented with predicted taxes based on information available from administrative tax data. Using these data, we find that Canadian after-tax inequality levels are substantially higher than has been previously recognized, primarily because income levels are lower at the bottom of the distribution than in commonly used survey data. We also find larger long-term increases in after-tax income inequality and far more variability over the economic cycle. This raises interesting questions about the role of the tax and transfer system in mitigating both trends and fluctuations in market income inequality.

Do Child Tax Benefits Affect the Well-Being of Children? Evidence from Canadian Child Benefit Expansions

We exploit changes in child benefits in Canada to study the impact of family income on child and family well-being. Using variation in child benefits across province, time, and family type, we study outcomes spanning test scores, mental health, physical health, and deprivation measures. The findings suggest that child benefit programs had significant positive effects on test scores, maternal health, and mental health, among other measures. We find strong and interesting differences in the effects of benefits by child sex: benefits have stronger effects on educational outcomes and physical health for boys, and on mental health outcomes for girls. (JEL I12, I31, I38, J13)

Boy-Girl Differences in Parental Time Investments: Evidence from Three Countries

We study differences in parental time investments in preschool girls and boys in Canada, the United Kingdom, and the United States. We find that investments in teaching activities like reading favor girls, starting at very young ages. We document that these boy/girl differences may be quantitatively important in explaining corresponding school-age test score gaps. We explore a parental preference explanation of these results. We find little support for a parental preference for girls (or boys) at young ages. As a result, the investment gaps may be due to sex differences in production functions or in the costs of delivering human capital investments.

Tax-Preferred Savings Accounts and Marginal Tax Rates: Evidence on Rrsp Participation

The percentage of Canadian with earned income who contributed to a Registered Retirement Savings Plan increased from 18.7 per cent in 1982 to 46.0 per cent in 1996. This period also saw many changes to the income tax structure. Using household expenditure survey data, I examine the influence of taxes on the decision to contribute to Registered Retirement Savings Plans. I improve on existing work by identifying the tax effect from within jurisdiction variation through time, rather than cross-sectional variation alone. I find that taxes do play a role in the contribution decision, but the effect of taxes is much smaller than suggested by the existing literature. A 10 percentage point increase in the marginal tax rate is estimated to increase the probability of participation by 8 per cent. This suggests that increases in marginal tax rates can explain only 5.1 per cent of the increase in Registered Retirement Savings Plan participation between 1982 and 1996. A carryforward mechanism for unused contribution room was introduced in 1991. I find evidence that the sensitivity of participation to future marginal tax rates increased after the introduction of the carryforward. This is consistent with the predictions of the model.

Taxes, Transfers, and Canadian Income Inequality

Dans cet article, nous analysons le lien que l’on observe, durant les années 1980 et 1990, entre, d’une part, les changements significatifs apportés aux régimes fiscaux et de transferts, et, d’autre part, les inégalités de revenus après impôt. Nous montrons que, durant les années 1980, les régimes fiscaux et de transferts sont devenus plus redistributifs, compensant ainsi d’importantes hausses d’inégalités de revenus marchands. Pendant les années 1990, les régimes ont cessé de réduire les hausses, et les inégalités de revenus après impôt se sont accrues. Néanmoins, depuis le début des années 2000, les régimes fiscaux et de transferts sont plus redistributifs qu’ils ne l’étaient dans les années 1980. La plupart de ces changements se sont faits au niveau provincial : les prestations d’aide sociale ont d’abord augmenté (durant les années 1980), puis baissé (durant les années 1990), et les salariés à revenu élevé ont subi une majoration d’impôt qui a ensuite été annulée.

Campaign Spending Limits, Incumbent Spending, and Election Outcomes

We study the impact of campaign spending limits for candidates in Canadian federal elections. We first demonstrate that spending limits are binding mostly for incumbent candidates. We then use this information to produce endogeneity-corrected estimates for the impact of incumbent spending on electoral vote shares. Furthermore, we examine the impact of spending limits on broader measures of electoral outcomes, finding that larger limits lead to less close elections, fewer candidates, and lower voter turnout.

Social Security and Retirement Around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participation and Reforms

In nearly every industrialized country, large aging populations and increased life expectancy have placed pressure on social security programs - and, until recently, the pressure has been compounded by a trend toward retirement at an earlier age. As such, social security in many countries may soon have to be reformed in order to remain viable. This volume offers an analysis of the effects of disability insurance programs on labor force participation by older workers. Drawing on measures of health comparable across countries, it explores how differences in the labor force are determined by disability insurance programs and to what extent reforms are prompted by the circumstances of a countrys elderly.