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

  • Vikman, Ulrika

    ()

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

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    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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    File URL: http://www.ifau.se/Upload/pdf/se/2013/wp2013-04-Paid-parental-leave-to-immigrants.pdf
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    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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    1. Dustmann, Christian & Fabbri, Francesca, 2000. "Language Proficiency and Labour Market Performance of Immigrants in the UK," IZA Discussion Papers 156, Institute for the Study of Labor (IZA).
    2. Nekby, Lena, 2002. "Employment Convergence of Immigrants and Natives in Sweden," Research Papers in Economics 2002:9, Stockholm University, Department of Economics.
    3. Amuedo Dorantes, Catalina & De la Rica Goiricelaya, Sara, 2006. "Labor Market Assimilation of Recent Immigrants in Spain," DFAEII Working Papers 2006-01, University of the Basque Country - Department of Foundations of Economic Analysis II.
    4. Kevin Milligan, 2002. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," NBER Working Papers 8845, National Bureau of Economic Research, Inc.
    5. 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.
    6. Lundborg, Per, 2007. "Assimilation in Sweden: Wages, Employment and Work Income," SULCIS Working Papers 2007:5, Stockholm University Linnaeus Center for Integration Studies - SULCIS.
    7. Ken Clark & Joanne Kathryn Lindley, 2005. "Immigrant Labour Market Assimilation and Arrival Effects: Evidence from the Labour Force Survey," Working Papers 2005004, The University of Sheffield, Department of Economics, revised Jan 2005.
    8. 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," Working Paper Series 2009:5, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    9. 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.
    10. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
    11. 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.
    12. Bertrand, M. & Luttmer, E.F.P. & Mullainathan, S., 1998. "Network Effects and Welfare Cultures," Papers 201, Princeton, Woodrow Wilson School - Public and International Affairs.
    13. George J. Borjas & Stephen J. Trejo, 1990. "Immigrant Participation in the Welfare System," NBER Working Papers 3423, National Bureau of Economic Research, Inc.
    14. Ana Ferrer & David A. Green & W. Craig Riddell, 2006. "The Effect of Literacy on Immigrant Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 41(2).
    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.
    16. Pål Longva & Oddbjørn Raaum, 2003. "Earnings assimilation of immigrants in Norway – A reappraisal," Journal of Population Economics, Springer, vol. 16(1), pages 177-193, 02.
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