DOES HELPING WOMEN HELP? THE IMPACT OF INDIA'S MATERNITY BENEFIT POLICY ON WOMEN'S PORTFOLIO ALLOCATION BEHAVIOUR.

Abstract

This paper examines the impact of India’s Maternity Benefit (Amendment) Act (2017) on women’s portfolio allocation behaviour. Using a panel dataset containing demographic and financial data, a difference-in-differences approach is used to compare the portfolio allocation behaviour of a group likely to be affected by the policy changes (married, formally-employed women) against another group that is unlikely to be affected (housewives). Findings reveal that the introduction of enhanced maternity benefits for female employees is associated with a significant reduction in portfolio risk exposure among the treatment group. Heterogeneity in response is also evident – the decrease in portfolio risk exposure is more pronounced in states with higher female labour force participation and higher financial literacy. A series of tests further demonstrate the robustness of the results. This study examines the spillover effects of maternity benefit policies on women’s financial behaviour, which may have broader implications on families’ financial outcomes and policy-making.