It's a Long Walk: Lasting Effects of Maternity Ward Openings on Labour Market Performance

Being born in a hospital versus having a traditional birth attendant at home represents the most common early life policy change worldwide. By applying a difference-in-differences approach to register-based individual-level data on the total population, this paper explores the long-term economic effects of the opening of new maternity wards as an early life quasi-experiment. It first finds that the reform substantially increased the share of hospital births and reduced early neonatal mortality. It then shows sizable long-term effects on labour income, unemployment, health-related disability and schooling. Small-scale local maternity wards yield a larger social rate of return than large-scale hospitals.