Abstract

Declining U.S. fertility levels and rising economic costs of child-rearing have prompted discussions about the effectiveness of existing social welfare policies in providing economic support related to childbirth. We examine changes in resources in the year after childbirth relative to the year before.

To do so, we use administrative data from Virginia for Unemployment Insurance wage records, the Supplemental Nutrition Assistance Program, and Temporary Assistance to Needy Families, with simulated benefits for the Earned Income Tax Credit, the Child Tax Credit, and the Special Supplemental Nutrition Program for Women, Infants, and Children.

We find that social welfare–connected mothers, on average, experience a $2,097 reduction in annual earnings, spend 2.2 quarters out of the labor market, and are connected to Temporary Assistance to Needy Families for 11.4 months and the Supplemental Nutrition Assistance Program for 18.4 months after childbirth. The total value of simulated safety net benefits offsets the lost earnings of our sample in the four quarters following childbirth but not during pregnancy and the quarter of childbirth.

Our results provide evidence that, under the assumption of full uptake, the existing safety net could mitigate economic insecurity following childbirth, but largely through nutrition assistance benefits, which are not fungible.