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Paid parental leave to immigrants: An obstacle to labor market entrance?

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  • Vikman, Ulrika

    ()
    (IFAU - Institute for Evaluation of Labour Market and Education Policy)

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    Abstract

    This paper evaluates how access to paid parental leave affects labor market entrance for immigrating mothers with small children. Paid parental leave together with job protection may increase labor force participation among women but if it is too generous it may create incentives to stay out of the labor force. This incentive effect may be especially true for mothers immigrating to a country where having small children automatically makes the mothers eligible for the benefit. To evaluate the differences in the assimilation process for those who have access to the parental leave benefit and those who do not, Swedish administration data is used in a difference-in-differences specification to control for both time in the country and the age of the youngest child. The results show that labor market entrance is delayed for mothers and that they are less likely to be a part of the labor force for up to seven years after theír residence permit if they had access to parental leave benefits when they came to Sweden. This reduction in the labor force participation is to some extent driven by unemployment since the effect on employment is smaller. But there is still an effect on employment of 3 percentage points lower participation rates 2-6 years after immigration.

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    Bibliographic Info

    Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2013:4.

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    Length: 57 pages
    Date of creation: 01 Feb 2013
    Date of revision:
    Handle: RePEc:hhs:ifauwp:2013_004

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    Keywords: Immigrant assimilation; labor market entrance; paid parental leave benefit;

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    1. Nekby, Lena, 2002. "Employment Convergence of Immigrants and Natives in Sweden," Research Papers in Economics 2002:9, Stockholm University, Department of Economics.
    2. Longva,P. & Raaum,O., 2000. "Earnings assimilation of immigrants in Norway : a reappraisal," Memorandum 05/2000, Oslo University, Department of Economics.
    3. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 463-89, October.
    4. Bergemann, Annette & Riphahn, Regina T., 2009. "Female Labor Supply and Parental Leave Benefits: The Causal Effect of Paying Higher Transfers for a Shorter Period of Time," IZA Discussion Papers 3982, Institute for the Study of Labor (IZA).
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    11. 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.
    12. 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.
    13. Hansen, Jörgen & Löfström, Magnus, 2000. "Immigrant Assimilation And Welfare Participation: Do Immigrants Assimilate Into Or Out Of Welfare?," CEPR Discussion Papers 2430, C.E.P.R. Discussion Papers.
    14. Christian Dustmann & Francesca Fabbri, 2003. "Language proficiency and labour market performance of immigrants in the UK," Economic Journal, Royal Economic Society, vol. 113(489), pages 695-717, 07.
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