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The Impact of Paternity Leave on Fathers’ Future Earnings

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  • Mari Rege
  • Ingeborg Solli

    ()

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    Abstract

    Using Norwegian registry data, we investigate the effect of paternity leave on fathers’ long-term earnings. If the paternity leave increased long-term father involvement, then we should expect a reduction in fathers’ long-term earnings as they shift time and effort from market to home production. For identification, we use the Norwegian introduction of a paternity-leave quota in 1993, reserving four weeks of the total of 42 weeks of paid parental leave exclusively for the father. The introduction of the paternity-leave quota led to a sharp increase in rates of leave-taking for fathers. We estimate a difference-in-differences model that exploits differences in fathers’ exposure to the paternity-leave quota by the child’s age and year of observation. Our analysis suggests that four weeks of paternity leave during the child’s first year decreases fathers’ future earnings, an effect that persists through our last point of observation, when the child is 5 years old. A battery of robustness tests supports our results. Copyright The Author(s) 2013

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    File URL: http://hdl.handle.net/10.1007/s13524-013-0233-1
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    Bibliographic Info

    Article provided by Springer in its journal Demography.

    Volume (Year): 50 (2013)
    Issue (Month): 6 (December)
    Pages: 2255-2277

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    Handle: RePEc:spr:demogr:v:50:y:2013:i:6:p:2255-2277

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    Web page: http://www.springer.com/economics/journal/13524

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    Related research

    Keywords: Father involvement; Household production; Parental leave; Paternity leave;

    References

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    1. Ekberg, John & Eriksson, Rickard & Friebel, Guido, 2005. "Parental Leave – A Policy Evaluation of the Swedish "Daddy-Month" Reform," IZA Discussion Papers 1617, Institute for the Study of Labor (IZA).
    2. Carneiro, Pedro & Loken, Katrine Vellesen & Salvanes, Kjell G., 2011. "A Flying Start? Maternity Leave Benefits and Long Run Outcomes of Children," IZA Discussion Papers 5793, Institute for the Study of Labor (IZA).
    3. Pierre Cahuc & André Zylberberg, 2004. "Labor Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 026203316x, December.
    4. Gordon B. Dahl & Lance Lochner, 2011. "The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20113, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
    5. Wen-Jui Han & Christopher Ruhm & Jane Waldfogel, 2007. "Parental Leave Policies and Parents' Employment and Leave-Taking," NBER Working Papers 13697, National Bureau of Economic Research, Inc.
    6. Rafael Lalive & Josef Zweimüller, 2009. "How does Parental Leave Affect Fertility and Return to Work? Evidence from Two Natural Experiments," The Quarterly Journal of Economics, MIT Press, vol. 124(3), pages 1363-1402, August.
    7. Michael Baker & Kevin S. Milligan, 2007. "Maternal employment, breastfeeding, and health: Evidence from maternity leave mandates," NBER Working Papers 13188, National Bureau of Economic Research, Inc.
    8. Michael Baker & Kevin Milligan, 2010. "Evidence from Maternity Leave Expansions of the Impact of Maternal Care on Early Child Development," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
    9. Jochen Kluve & Marcus Tamm, 2013. "Parental leave regulations, mothers’ labor force attachment and fathers’ childcare involvement: evidence from a natural experiment," Journal of Population Economics, Springer, vol. 26(3), pages 983-1005, July.
    10. Sara Cools & Jon H. Fiva & Lars Johannessen Kirkebøen, 2011. "Causal effects of paternity leave on children and parents," Discussion Papers 657, Research Department of Statistics Norway.
    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. Becker, Gary S, 1985. "Human Capital, Effort, and the Sexual Division of Labor," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages S33-58, January.
    13. Christopher J. Ruhm, 2004. "Parental Employment and Child Cognitive Development," Journal of Human Resources, University of Wisconsin Press, vol. 39(1).
    14. Anne Gauthier, 2007. "The impact of family policies on fertility in industrialized countries: a review of the literature," Population Research and Policy Review, Springer, vol. 26(3), pages 323-346, June.
    15. Michael Baker & Kevin Milligan, 2008. "How Does Job-Protected Maternity Leave Affect Mothers' Employment?," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 655-691, October.
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    Cited by:
    1. Drange, Nina & Rege, Mari, 2013. "Trapped at home: The effect of mothers' temporary labor market exits on their subsequent work career," Labour Economics, Elsevier, vol. 24(C), pages 125-136.
    2. Almås, Ingvild & Cappelen, Alexander W. & Salvanes, Kjell G. & Sørensen, Erik Ø. & Tungodden, Bertil, 2014. "Willingness to Compete: Family Matters," Discussion Paper Series in Economics 3/2014, Department of Economics, Norwegian School of Economics.

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