On Wednesday 22 April, a session of the ISEG Research Seminars will take place from 13.00 to 14.00. The guest speaker will be Libertad González.
The ISEG Research Seminars are held every week on Wednesdays, with the participation of professors from ISEG, as well as from other Portuguese and international educational institutions.
Title
Maternity Benefits, Consumption and Labour Supply: Estimating Causal Effects with Bank Transaction Data
Abstract
We estimate the causal effects of a generous maternity benefit introduced in Madrid in 2022, which granted €500 per month until a child's second birthday to mothers under the age of 31. We exploit the sharp eligibility cutoff on 1 January 2022, using a regression discontinuity design and high-frequency bank transaction data covering daily spending, earnings, and account balances. Eligible mothers received, on average, over €7,000 in benefit payments in the 24 months following childbirth. Total spending increased by about €1,200, implying an average MPC of 0.16, with strong heterogeneity: the MPC is zero among higher-income mothers and rises to 0.4 among lower-income mothers, who show sizable increases in basic-necessity spending and sharp, short-lived spikes in expenditure after each deposit. Higher-income mothers exhibit no meaningful change in consumption and save more than half of the benefit, with no robust evidence of changes in labour earnings. Across administrative, survey and transaction data, we find no aggregate decline in employment. Overall, the benefit appears to alleviate liquidity constraints for lower-income mothers while leaving the labour supply largely unaffected.
