IDEAS home Printed from https://ideas.repec.org/a/oup/econjl/v135y2025i669p1467-1495..html

Parental Leave, Worker Substitutability and Firms’ Employment

Author

Listed:
  • Mathias Huebener
  • Jonas Jessen
  • Daniel Kuehnle
  • Michael Oberfichtner

Abstract

Motherhood and parental leave are frequent causes of worker absences and employment interruptions, yet little is known about their effects on firms. Based on linked employer-employee data from Germany, we examine how parental leave absences affect small- and medium-sized firms. We show that they anticipate the absence with replacement hirings in the six months before childbirth. A 2007 parental leave reform extending leave absences reduces firm-level employment and total wages up to three years after childbirth, driven by firms with few internal substitutes for the absent mother. However, we do not find longer-term effects on firms’ employment, wage bills or likelihood to shut down. The reform led to an increase in replacement hirings, but firms did not respond to longer expected absences of mothers by subsequently hiring fewer young women. Overall, our findings show that anticipated, extended parental leave does not have a lasting impact on firms.

Suggested Citation

  • Mathias Huebener & Jonas Jessen & Daniel Kuehnle & Michael Oberfichtner, 2025. "Parental Leave, Worker Substitutability and Firms’ Employment," The Economic Journal, Royal Economic Society, vol. 135(669), pages 1467-1495.
    • Handle: RePEc:oup:econjl:v:135:y:2025:i:669:p:1467-1495.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/ej/ueae114
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. is not listed on IDEAS
    2. Nezih Guner & Ezgi Kaya & Alessandro Ruggieri & Virginia Sánchez-Marcos, 2025. "Firms, Flexibility, and Fertility," Working Papers wp2025_2525, CEMFI.
    3. Brenøe, Anne Ardila & Krenk, Ursa & Steinhauer, Andreas & Zweimüller, Josef, 2025. "How Do Firms Respond to Parental Leave Absences?," IZA Discussion Papers 17845, Institute of Labor Economics (IZA).
    4. Bamieh, Omar & Ziegler, Lennart, 2023. "Gender-age differences in hiring rates and prospective wages—Evidence from job referrals to unemployed workers," Labour Economics, Elsevier, vol. 83(C).
    5. Houmark, Mikkel Aagaard & Jørgensen, Cecilie Marie Løchte & Kristiansen, Ida Lykke & Gensowski, Miriam, 2024. "Effects of extending paid parental leave on children’s socio-emotional skills and well-being in adolescence," European Economic Review, Elsevier, vol. 170(C).
    6. Anne Brenoe & Ursa Krenk & Andreas Steinhauer & Josef Zweimueller, 2025. "How Do Firms Respond to Parental Leave Absences?," RFBerlin Discussion Paper Series 2514, ROCKWOOL Foundation Berlin (RFBerlin).

    More about this item

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:econjl:v:135:y:2025:i:669:p:1467-1495.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/resssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.