IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp17845.html
   My bibliography  Save this paper

How Do Firms Respond to Parental Leave Absences?

Author

Listed:
  • Brenøe, Anne Ardila

    (University of Zurich)

  • Krenk, Ursa

    (University of Zurich)

  • Steinhauer, Andreas

    (University of Edinburgh)

  • Zweimüller, Josef

    (University of Zurich)

Abstract

How do firms adjust their labor demand when a female employee takes temporary leave after childbirth? Using Austrian administrative data, we compare firms with and without a birth event and exploit policy reforms that significantly altered leave durations. We find that (i) firms adjust hiring, employment, and wages around leave periods, but these effects fade quickly; (ii) adjustments differ sharply by gender, reflecting strong gender segregation within firms; (iii) longer leave entitlements extend actual leave absences but have only short-term effects; and (iv) there is no impact on firm closure up to five years after birth.

Suggested Citation

  • 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).
  • Handle: RePEc:iza:izadps:dp17845
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp17845.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jérôme Adda & Christian Dustmann & Katrien Stevens, 2017. "The Career Costs of Children," Journal of Political Economy, University of Chicago Press, vol. 125(2), pages 293-337.
    2. Alessandro Gavazza & Simon Mongey & Giovanni L. Violante, 2018. "Aggregate Recruiting Intensity," American Economic Review, American Economic Association, vol. 108(8), pages 2088-2127, August.
    3. William J. Carrington & Kenneth R. Troske, 1995. "Gender Segregation in Small Firms," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 503-533.
    4. Claudia Goldin & Sari Pekkala Kerr & Claudia Olivetti, 2020. "Why Firms Offer Paid Parental Leave: An Exploratory Study," NBER Working Papers 26617, National Bureau of Economic Research, Inc.
    5. Henrik Kleven & Camille Landais & Johanna Posch & Andreas Steinhauer & Josef Zweimüller, 2024. "Do Family Policies Reduce Gender Inequality? Evidence from 60 Years of Policy Experimentation," American Economic Journal: Economic Policy, American Economic Association, vol. 16(2), pages 110-149, May.
    6. Xavier Jaravel & Neviana Petkova & Alex Bell, 2018. "Team-Specific Capital and Innovation," American Economic Review, American Economic Association, vol. 108(4-5), pages 1034-1073, April.
    7. Henrik Kleven & Camille Landais & Jakob Egholt Søgaard, 2019. "Children and Gender Inequality: Evidence from Denmark," American Economic Journal: Applied Economics, American Economic Association, vol. 11(4), pages 181-209, October.
    8. Yusuf Mercan & Benjamin Schoefer, 2020. "Jobs and Matches: Quits, Replacement Hiring, and Vacancy Chains," American Economic Review: Insights, American Economic Association, vol. 2(1), pages 101-124, March.
    9. Francine D. Blau & Lawrence M. Kahn, 2017. "The Gender Wage Gap: Extent, Trends, and Explanations," Journal of Economic Literature, American Economic Association, vol. 55(3), pages 789-865, September.
    10. David Card & Ana Rute Cardoso & Patrick Kline, 2016. "Bargaining, Sorting, and the Gender Wage Gap: Quantifying the Impact of Firms on the Relative Pay of Women," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 633-686.
    11. Michael W L Elsby & Axel Gottfries, 2022. "Firm Dynamics, On-the-Job Search, and Labor Market Fluctuations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(3), pages 1370-1419.
    12. Daniel S. Hamermesh & Gerard A. Pfann, 1996. "Adjustment Costs in Factor Demand," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1264-1292, September.
    13. Muehlemann, Samuel & Strupler Leiser, Mirjam, 2018. "Hiring costs and labor market tightness," Labour Economics, Elsevier, vol. 52(C), pages 122-131.
    14. Ingrid Haegele, 2024. "The Broken Rung: Gender and the Leadership Gap," Papers 2404.07750, arXiv.org.
    15. V. Joseph Hotz & Per Johansson & Arizo Karimi, 2017. "Parenthood, Family Friendly Workplaces, and the Gender Gaps in Early Work Careers," NBER Working Papers 24173, National Bureau of Economic Research, Inc.
    16. Silva, José Ignacio & Toledo, Manuel, 2009. "Labor Turnover Costs And The Cyclical Behavior Of Vacancies And Unemployment," Macroeconomic Dynamics, Cambridge University Press, vol. 13(S1), pages 76-96, May.
    17. Anne Ardila Brenøe & Serena Canaan & Nikolaj A. Harmon & Heather N. Royer, 2024. "Is Parental Leave Costly for Firms and Coworkers?," Journal of Labor Economics, University of Chicago Press, vol. 42(4), pages 1135-1174.
    18. Mathias Huebener & Jonas Jessen & Daniel Kuehnle & Michael Oberfichtner, 2022. "Parental Leave, Worker Substitutability, and Firms' Employment," Berlin School of Economics Discussion Papers 0007, Berlin School of Economics.
    19. Biddle, Jeff E. & Hamermesh, Daniel S., 2024. "Adjusting Labor along the Intensive MarginS," IZA Discussion Papers 17162, Institute of Labor Economics (IZA).
    20. Pierre Azoulay & Joshua S. Graff Zivin & Jialan Wang, 2010. "Superstar Extinction," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(2), pages 549-589.
    21. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70(6), pages 538-538.
    22. Sascha O Becker & Hans K Hvide, 2022. "Entrepreneur Death and Startup Performance [The knowledge spillover theory of entrepreneurship]," Review of Finance, European Finance Association, vol. 26(1), pages 163-185.
    23. Julien Sauvagnat & Fabiano Schivardi, 2024. "Are Executives in Short Supply? Evidence from Death Events," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(1), pages 519-559.
    24. Elaine Sorensen, 1990. "The Crowding Hypothesis and Comparable Worth," Journal of Human Resources, University of Wisconsin Press, vol. 25(1), pages 55-89.
    25. 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, President and Fellows of Harvard College, vol. 124(3), pages 1363-1402.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Corekcioglu, Gozde & Francesconi, Marco & Kunze, Astrid, 2024. "Expansions in paid parental leave and mothers’ economic progress," European Economic Review, Elsevier, vol. 169(C).
    2. Monica Costa Dias & Robert Joyce & Francesca Parodi, 2019. "The gender pay gap in the UK: children and experience in work," Carlo Alberto Notebooks 594, Collegio Carlo Alberto.
    3. Thomas Høgholm Jørgensen & Jakob Egholt Søgaard, 2021. "Welfare Reforms and the Division of Parental Leave," CESifo Working Paper Series 9035, CESifo.
    4. Olivetti, Claudia & Pan, Jessica & Petrongolo, Barbara, 2024. "The evolution of gender in the labor market," Handbook of Labor Economics,, Elsevier.
    5. Nicole M. Fortin, 2019. "Increasing earnings inequality and the gender pay gap in Canada: Prospects for convergence," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(2), pages 407-440, May.
    6. Pierre-Jean Messe & Jeremy Tanguy, 2022. "Does gender equality bargaining reduce child penalty? Evidence from France," TEPP Working Paper 2022-19, TEPP.
    7. Amano-Patiño, N. & Baron, T. & Xiao, P., 2020. "Human Capital Accumulation, Equilibrium Wage-Setting and the Life-Cycle Gender Pay Gap," Cambridge Working Papers in Economics 2010, Faculty of Economics, University of Cambridge.
    8. Boinet, Césarine & Norris, Jonathan & Romiti, Agnese & Shi, Zhan & Telemo, Paul, 2024. "Beliefs on Children's Human Capital Formation and Mothers at Work," IZA Discussion Papers 17574, Institute of Labor Economics (IZA).
    9. Rita Ginja & Arizo Karimi & Pengpeng Xiao, 2023. "Employer Responses to Family Leave Programs," American Economic Journal: Applied Economics, American Economic Association, vol. 15(1), pages 107-135, January.
    10. Gørtz, Mette & Sander, Sarah & Sevilla, Almudena, 2023. "Does the Child Penalty Strike Twice, and If So Why?," IZA Discussion Papers 16557, Institute of Labor Economics (IZA).
    11. Fortin, Nicole M. & Bell, Brian & Böhm, Michael, 2017. "Top earnings inequality and the gender pay gap: Canada, Sweden, and the United Kingdom," Labour Economics, Elsevier, vol. 47(C), pages 107-123.
    12. Brenøe, Anne Ardila & Canaan, Serena & Harmon, Nikolaj & Royer, Heather, 2019. "Is Parental Leave Costly for Firms and Coworkers?," IZA Discussion Papers 12870, Institute of Labor Economics (IZA).
    13. Lucifora, Claudio & Meurs, Dominique & Villar, Elena, 2021. "The “mommy track” in the workplace. Evidence from a large French firm," Labour Economics, Elsevier, vol. 72(C).
    14. Salvanes, Kjell G & Johnsen, Julian Vedeler & Ku, Hyejin, 2020. "Competition and Career Advancement: The Hidden Costs of Paid Leave," CEPR Discussion Papers 15157, C.E.P.R. Discussion Papers.
    15. Dahl, Gordon & Loken, Katrine V., 2024. "Families, public policies, and the labor market," Handbook of Labor Economics,, Elsevier.
    16. Francesca Barigozzi & Helmuth Cremer & Emmanuel Thibault, 2024. "The motherhood wage and income traps," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(4), pages 1-26, December.
    17. Gordon Dahl & Katrine Loken, 2024. "Families, Public Policies, and the Labor Market," RF Berlin - CReAM Discussion Paper Series 2423, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    18. Barigozzi, Francesca & Cremer, Helmuth & Roeder, Kerstin, 2018. "Women's career choices, social norms and child care policies," Journal of Public Economics, Elsevier, vol. 168(C), pages 162-173.
    19. Artmann, Elisabeth & Oosterbeek, Hessel & van der Klaauw, Bas, 2022. "Household specialization and the child penalty in the Netherlands," Labour Economics, Elsevier, vol. 78(C).
    20. Inés Berniell & Lucila Berniell & Dolores de la Mata & María Edo & Yarine Fawaz & Matilde P. Machado & Mariana Marchionni, 2020. "Motherhood and the Allocation of Talent," CEDLAS, Working Papers 0270, CEDLAS, Universidad Nacional de La Plata.

    More about this item

    Keywords

    absence duration; gender; labor demand; labor supply; firms; family leave;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:iza:izadps:dp17845. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.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.