The effects of mandatory maternity and pregnancy benefits on women's wages and employment in Taiwan, 1984-1996

The Labor Standards Law of Taiwan requires employers to offer maternity and pregnancy benefits. Because these requirements increase the cost to firms of employing young women, standard economic theory predicts that such workers will experience a relative decline in employment, wages, or both. Using data from Taiwan's Manpower Utilization Survey for the years 1978-96, the authors find that in those sectors of the economy covered by the legislation, wages and employment of young women did indeed fall relative to the wages and employment of two comparison groups, young men and older women.