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Parental Leave and Mothers' Careers: The Relative Importance of Job Protection and Cash Benefits

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  • Rafael Lalive
  • Analía Schlosser
  • Andreas Steinhauer
  • Josef Zweimüller

Abstract

Job protection and cash benefits are key elements of parental leave (PL) systems. We study how these two policy instruments affect return-to-work and medium-run labour market outcomes of mothers of newborn children. Analysing a series of major PL policy changes in Austria, we find that longer cash benefits lead to a significant delay in return-to-work, particularly so in the period that is job-protected. Prolonged parental leave absence induced by these policy changes does not appear to hurt mothers' labour market outcomes in the medium run. We build a non-stationary model of job search after childbirth to isolate the role of the two policy instruments. The model matches return-to-work and return to same employer profiles under the various factual policy configurations. Counterfactual policy simulations indicate that a system that combines cash with protection dominates other systems in generating time for care immediately after birth while maintaining mothers' medium-run labour market attachment. Copyright 2014, Oxford University Press.

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Bibliographic Info

Article provided by Oxford University Press in its journal Review of Economic Studies.

Volume (Year): 81 (2014)
Issue (Month): 1 ()
Pages: 219-265

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Handle: RePEc:oup:restud:v:81:y:2014:i:1:p:219-265

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  1. Lalive, Rafael, 2006. "How Do Extended Benefits Affect Unemployment Duration? A Regression Discontinuity Approach," IZA Discussion Papers 2200, Institute for the Study of Labor (IZA).
  2. Schönberg, Uta & Ludsteck, Johannes, 2007. "Maternity Leave Legislation, Female Labor Supply, and the Family Wage Gap," IZA Discussion Papers 2699, Institute for the Study of Labor (IZA).
  3. Baum, Charles II, 2003. "The effect of state maternity leave legislation and the 1993 Family and Medical Leave Act on employment and wages," Labour Economics, Elsevier, vol. 10(5), pages 573-596, October.
  4. David Card & Dean R. Hyslop, 2004. "Estimating the Effects of a Time Limited Earnings Subsidy for Welfare Leavers," NBER Working Papers 10647, National Bureau of Economic Research, Inc.
  5. Wen-Jui Han & Jane Waldfogel, 2003. "Parental leave: The impact of recent legislation on parents’ leave taking," Demography, Springer, vol. 40(1), pages 191-200, February.
  6. repec:eme:rlepps:v:18:y:1999:i:1999:p:41-74 is not listed on IDEAS
  7. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-09, January.
  8. Boone, Jan & van Ours, Jan C., 2009. "Why is there a spike in the job finding rate at benefit exhaustion?," CEPR Discussion Papers 7525, C.E.P.R. Discussion Papers.
  9. David S. Lee, 2002. "Trimming for Bounds on Treatment Effects with Missing Outcomes," NBER Technical Working Papers 0277, National Bureau of Economic Research, Inc.
  10. Merz, Monika, 2004. "Women's Hours of Market Work in Germany: The Role of Parental Leave," IZA Discussion Papers 1288, Institute for the Study of Labor (IZA).
  11. Christopher J. Ruhm, 1996. "The Economic Consequences of Parental Leave Mandates: Lessons from Europe," NBER Working Papers 5688, National Bureau of Economic Research, Inc.
  12. Rafael Lalive & Josef Zweimüller, . "Does Parental Leave Affect Fertility and Return-to-Work? Evidence from a ”True Natural Experiment”," IEW - Working Papers 242, Institute for Empirical Research in Economics - University of Zurich.
  13. Hashimoto, Masanori & Percy, Rick & Schoellner, Teresa & Weinberg, Bruce A., 2004. "The Long and Short of It: Maternity Leave Coverage and Women’s Labor Market Outcomes," IZA Discussion Papers 1207, Institute for the Study of Labor (IZA).
  14. Jan Ondrich & C. Spiess & Qing Yang & Gert Wagner, 2003. "The Liberalization of Maternity Leave Policy and the Return to Work after Childbirth in Germany," Review of Economics of the Household, Springer, vol. 1(1), pages 77-110, January.
  15. Michael Baker & Kevin Milligan, 2005. "How Does Job-Protected Maternity Leave Affect Mothers' Employment and Infant Health?," NBER Working Papers 11135, National Bureau of Economic Research, Inc.
  16. Lawrence M. Berger & Jane Waldfogel, 2004. "Maternity leave and the employment of new mothers in the United States," Journal of Population Economics, Springer, vol. 17(2), pages 331-349, 06.
  17. Pylkkänen, Elina & Smith, Nina, 2004. "The Impact of Family-Friendly Policies in Denmark and Sweden on Mothers' Career Interruptions Due to Childbirth," IZA Discussion Papers 1050, Institute for the Study of Labor (IZA).
  18. Jane Waldfogel, 1999. "The impact of the family and medical leave act," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 18(2), pages 281-302.
  19. Charles L. Baum II, 2003. "The Effects of Maternity Leave Legislation on Mothers' Labor Supply after Childbirth," Southern Economic Journal, Southern Economic Association, vol. 69(4), pages 772-799, April.
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Citations

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Cited by:
  1. René Böheim & Mario Francesconi & Martin Halla, 2012. "Does custody law affect family behavior in and out of marriage?," NRN working papers 2012-15, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  2. Garmann, Sebastian, 2013. "Elected or Appointed? How the Nomination Scheme of the City Manager Influences the Effects of Government Fragmentation," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79892, Verein für Socialpolitik / German Economic Association.
  3. Joseph, Olivier & Pailhé, Ariane & Recotillet, Isabelle & Solaz, Anne, 2013. "The economic impact of taking short parental leave: Evaluation of a French reform," Labour Economics, Elsevier, vol. 25(C), pages 63-75.
  4. Geyer, Johannes & Haan, Peter & Spieß, C. Katharina & Wrohlich, Katharina, 2013. "Das Elterngeld und seine Wirkungen auf das Haushaltseinkommen junger Familien und die Erwerbstätigkeit von Müttern," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 193-211.
  5. Johannes Geyer & Peter Haan & Katharina Wrohlich, 2014. "The Effects of Family Policy on Mothers' Labor Supply: Combining Evidence from a Structural Model and a Natural Experiment," Discussion Papers of DIW Berlin 1366, DIW Berlin, German Institute for Economic Research.
  6. Karimi, Arizo & Lindahl, Erica & Skogman Thoursie, Peter, 2012. "Labour Supply Responses to Paid Parental Leave," Working Paper Series, Center for Labor Studies 2012:20, Uppsala University, Department of Economics.

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