Employment Protection and Parental Child Care
I examine if employment protection affects parental childcare. I find that a softer employment protection has a substantial effect on how parents use and divide paid childcare between them. The identification relies on a reform that made it easier for employers in Sweden to dismiss workers in small firms. I estimate that a softer employment protection reduces the total days of parental childcare in targeted firms, measured as total days of parental leave or temporary parental leave. Both a sorting effect and a behavioral effect can explain the reduced childcare. I also find evidence of a redistribution effect of paid parental childcare within households if only one partner was affected by the reform. I interpret the redistribution effect as a way of evading an external cost on the child.
|Date of creation:||06 Feb 2013|
|Date of revision:|
|Contact details of provider:|| Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden|
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