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Unintended Effects of a Family-Friendly Law in a Segmented Labor Market

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Author Info

  • Fernández-Kranz, Daniel

    ()
    (IE Business School, Madrid)

  • Rodríguez-Planas, Núria

    ()
    (Queens College, CUNY)

Abstract

Family-friendly laws may backfire if not all workers with access to the policies use them. Because these policies are costly to the employer, hiring practices may consequently be affected at the detriment of the at-risk population who may end up accessing the policy. We exploit a 1999 Spanish law that granted all workers with children under 7 years the right to work part-time. Most importantly, the law declared a layoff invalid if the worker had previously asked for a work-week reduction due to family responsibilities. Using a difference-in-differences (DD) methodology, we first find evidence that the law increased part-time work among eligible mothers with a permanent contract, but had no effect on eligible fathers or mothers with a temporary contract. This effect is driven by the less-educated women. Then, using both a DD and a DDD approach, we analyze the effects of the law among the at-risk population, i.e., childbearing-aged women with no children under 7. We find that this policy led to the unintended effect of decreasing the likelihood of being employed with a permanent contract among the at-risk high-school graduate women (relative to their male counterpart), while increasing their relative likelihood of having a fixed-term contract job. These findings suggest that, after the law, employers preferred hiring childbearing-aged men under permanent contracts (offering fixed-term contracts to childbearing-aged women).

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5709.

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Length: 44 pages
Date of creation: May 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5709

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Related research

Keywords: temporary employment; flexible work arrangement laws; European unemployment;

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References

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  1. Farré, Lídia & Gonzalez, Libertad & Ortega, Francesc, 2009. "Immigration, Family Responsibilities and the Labor Supply of Skilled Native Women," IZA Discussion Papers 4265, Institute for the Study of Labor (IZA).
  2. Catalina Amuedo-Dorantes & Jean Kimmel, 2005. "“The Motherhood Wage Gap for Women in the United States: The Importance of College and Fertility Delay”," Review of Economics of the Household, Springer, vol. 3(1), pages 17-48, 09.
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Cited by:
  1. Sara de la Rica & Lucía Gorjón García, 2013. "The impact of family-friendly policies on the labor market: Evidence from Spain and Austria," Working Papers 2013-15, FEDEA.

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