Working after eight months of pregnancy is as harmful for babies as smoking, according to a new study.

Women who worked after they were eight months pregnant had babies on average around 230g (0.5lb) lighter than those who stopped work between six and eight months.

The University of Essex research – which drew on data from three major studies, two in the UK and one in the US – found the effect of continuing to work during the late stages of pregnancy was equal to that of smoking while pregnant. Babies whose mothers worked or smoked throughout pregnancy grew more slowly in the womb.

Past research has shown babies with low birth weights are at higher risk of poor health and slow development, and may suffer from a variety of problems later in life.

Stopping work early in pregnancy was particularly beneficial for women with lower levels of education, the study found – suggesting that the effect of working during pregnancy was possibly more marked for those doing physically demanding work.

The birth weight of babies born to mothers under the age of 24 was not affected by them continuing to work, but in older mothers the effect was more significant.

The researchers identified 1,339 children whose mothers were part of the British Household Panel Survey, which was conducted between 1991 and 2005, and for whom data was available.

A further sample of 17,483 women who gave birth in 2000 or 2001 and who took part in the Millennium Cohort Study was also examined and showed similar results, along with 12,166 from the National Survey of Family Growth, relating to births in the US between the early 1970s and 1995.

One of the authors of the study, Prof Marco Francesconi, said the government should consider incentives for employers to offer more flexible maternity leave to women who might need a break before, rather than after, their babies were born.

He said: "We know low birth weight is a predictor of many things that happen later, including lower chances of completing school successfully, lower wages and higher mortality. We need to think seriously about parental leave, because – as this study suggests – the possible benefits of taking leave flexibly before the birth could be quite high." The study also suggests British women may be working for longer now during pregnancy. While 16% of mothers questioned by the British Household Panel Study, which went as far back as 1991, worked up to one month before the birth, the figure was 30% in the Millennium Cohort Study, whose subjects were born in 2000 and 2001.

The research, conducted by three economists, Francesconi, Emilia Del Bono and John Ermisch, is published in the July edition of the Journal of Labour Economics, published by the University of Chicago.