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

  • Vikman, Ulrika

    ()

    (Uppsala Center for Labor Studies)

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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 their 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.ucls.nek.uu.se/digitalAssets/160/160711_20134.pdf
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    Paper provided by Uppsala University, Department of Economics in its series Working Paper Series, Center for Labor Studies with number 2013:4.

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    Length: 51 pages
    Date of creation: 14 Feb 2013
    Date of revision:
    Handle: RePEc:hhs:uulswp:2013_004
    Contact details of provider: Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
    Phone: + 46 18 471 25 00
    Fax: + 46 18 471 14 78
    Web page: http://www.nek.uu.se/
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    1. 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.
    2. Annette Bergemann & Regina T. Riphahn, 2009. "Female Labor Supply and Parental Leave Benefits: The Causal Effect of Paying Higher Transfers for a Shorter Period of Time," SOEPpapers on Multidisciplinary Panel Data Research 161, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. 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.
    4. George J. Borjas & Stephen J. Trejo, 1990. "Immigrant Participation in the Welfare System," NBER Working Papers 3423, National Bureau of Economic Research, Inc.
    5. Catalina Amuedo-Dorantes & Sara de la Rica, 2007. "Labour Market Assimilation of Recent Immigrants in Spain," British Journal of Industrial Relations, London School of Economics, vol. 45(2), pages 257-284, 06.
    6. 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.
    7. Hansen, Jörgen & Lofstrom, Magnus, 1999. "Immigrant Assimilation and Welfare Participation: Do Immigrants Assimilate Into or Out-of Welfare," IZA Discussion Papers 100, Institute for the Study of Labor (IZA).
    8. Kevin Milligan, 2002. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," NBER Working Papers 8845, National Bureau of Economic Research, Inc.
    9. Borjas, George J. & Trejo, Stephen J., 1993. "National origin and immigrant welfare recipiency," Journal of Public Economics, Elsevier, vol. 50(3), pages 325-344, March.
    10. 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.
    11. Nekby, Lena, 2002. "Employment Convergence of Immigrants and Natives in Sweden," Research Papers in Economics 2002:9, Stockholm University, Department of Economics.
    12. 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.
    13. 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).
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