National Work-Family Policies and Gender Earnings Inequality in 26 OECD Countries, 1999–2019

We investigate whether work-family policies help incorporate women into the labor market, but exacerbate the gender earnings gap and motherhood penalty, especially for mothers and/or tertiary-educated women. We use repeated cross-sectional income data from the Luxembourg Income Study Database (LIS) 1999–2019 (n = 26 countries, 280 country-years, 2.9 million employees) combined with an original collection of indicators on work-family policies, labor market conditions, and gender norms. We find only one work-family policy, long paid parental leave (> 6 months), is associated with a larger gender earnings gap for mothers and tertiary-educated women. The negative relationship between long paid leave and women’s earning percentile is not well explained by selection, full-time status, work hours, experience, occupation, or sector, suggesting discrimination mechanisms. Our findings add to the growing evidence that long paid leave specifically, as opposed to work-family policies more generally, cleave the labor market outcomes of women from men.