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Does an Introduction of a Paid Parental Leave Policy Affect Maternal Labor Market Outcomes in the Short Run? Evidence from Australia’s Paid Parental Leave Scheme

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  • Bass Brittany

    (Department of Economics, Sacramento State University, 6000 J Street, Sacramento, CA95819. United States of America)

Abstract

This paper studies how an introduction of paid parental leave (PPL) affects maternal labor market outcomes in the short run. Using a reform in Australia, the PPL scheme, that gave the primary caregiver of a child born or adopted on or after January 1 2011, $672.70 a week for a maximum of 18 weeks, this paper develops theoretical predictions of the effect of PPL on maternal labor market outcomes, and tests these predictions using confidential data from the Australian Pregnancy and Employment Transitions Survey. The theoretical results imply that after the introduction of PPL, hours of work in the pre-birth period should decrease for mothers who will qualify for PPL, and increase for mothers who are attempting to qualify for PPL. Post birth, the theoretical results imply that more mothers are out of work and on leave than would have been in the absence of PPL. The empirical results suggest that the PPL scheme had no significant effect on labor market outcomes pre birth or post birth.

Suggested Citation

  • Bass Brittany, 2020. "Does an Introduction of a Paid Parental Leave Policy Affect Maternal Labor Market Outcomes in the Short Run? Evidence from Australia’s Paid Parental Leave Scheme," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-21, March.
    • Handle: RePEc:vrs:izajlp:v:10:y:2020:i:1:p:21:n:3
    DOI: 10.2478/izajolp-2020-0004
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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