It’s a long walk: Lasting effects of the openings of maternity wards on labour market performance

Studies showing that large-scale public health interventions in early life have lasting consequences are still scarce and rarely disclose the mechanisms. In 1931–1946, the Swedish state reformed the childbirth institutional system that led to the openings of the new maternity wards and to the gradual decline in home deliveries assisted by midwives. Maternity wards offered improved conditions for a mother and a newborn, such as hygiene, surgical proficiency and medications, health monitoring, and opportunity to recover. This paper aims at exploring the long-term economic effects of access to better health services at birth using openings of maternity wards as a quasi-experiment. It employs register-based individual-level data on the total population, observed in the first month of life and in ages 37–64, and multi-sourced archival data on characteristics of the reform. The empirical strategy makes use of a difference-in-differences method and geo-coding techniques. The paper first finds that the reform substantially reduced neonatal mortality in the short term. It then shows sizable long-term effects of the introduction of maternity wards versus a midwifery-assisted home childbirth, amounting 2.4–4.7 percent for labour income and 4.4–11.9 percent for disability pension. The effects run directly through better health (up to 8.5 percent decrease in the length of stay in hospital) and indirectly through higher educational attainment (up to 9.4 percent increase in the propensity to complete high school). Both large-scale remote and small local maternity wards produce similarly strong long-term effects, which are explained by an equal distribution of early-life health technology, exemplified in the paper by the arrival of sulphonamides against puerperal fever.