Does a Mother's Early Return to Work after Childbirth Improve Her Future Employment Status?

We examine whether a mother's early return to work after her first birth improves her employment status in the short term and the long term (3 and 10/12 years after the child's birth). Specifically, this research investigates whether a mother is more likely to be in full‐time employment if she returns to work within 1 year of childbirth (i.e. without using her allowable parental leave to the full). We estimate recursive bivariate probit models for a mother's early return to work and her subsequent employment status using July births as an instrument. Our approach is unique in that we shed light on the relationship between the timing of a birth (birth month) and the timing of a mother's return to work after childbirth. The birth month affects the cut‐off dates for admission into a licensed childcare facility in Japan, which, in turn, affects the timing of a mother's return to work. Our empirical evidence reveals that a mother's early return to work after her first birth has a positive causal effect on the likelihood of her being in full‐time employment in the long term (10 and 12 years after childbirth). We do not find any causal effect of an early return to work on working full time in the short term (3 years after childbirth).