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The effect of maternity leave extensions on firms and coworkers

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  • Gallen, Yana

Abstract

While a large literature is devoted to understanding the impact of maternity leave on children's outcomes and the careers of women, less is known about the consequences of maternity leave at the workplace. This paper studies the effects of maternity leave on firms and coworkers by examining a 2002 Danish reform which increased the length of parental leave by 22 weeks. The timing of the policy change gives random variation in the length of leave available to women who gave birth around the time of the reform. I find no detectable effect of the reform on the earnings or promotions of coworkers in any of the five years after the reform (point estimates are about $100) and can reject differences in yearly earnings larger than $425 overall and differences larger than $280 for female coworkers. While there are some costs for coworkers in the same occupation as women who give birth in the sample period, these costs are 1-1.5 percent of earnings. I also find evidence that the reform increases the probability of firm shut-down by about two percentage points five years after the reform, concentrated among relatively small firms. Conditional on survival, I find no impact of the reform on firm value added.

Suggested Citation

  • Gallen, Yana, 2016. "The effect of maternity leave extensions on firms and coworkers," MPRA Paper 73284, University Library of Munich, Germany, revised 23 Aug 2016.
  • Handle: RePEc:pra:mprapa:73284
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    File URL: https://mpra.ub.uni-muenchen.de/73284/1/MPRA_paper_73284.pdf
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    References listed on IDEAS

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    1. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    2. Gordon B. Dahl & Katrine V. L?ken & Magne Mogstad, 2014. "Peer Effects in Program Participation," American Economic Review, American Economic Association, vol. 104(7), pages 2049-2074, July.
    3. Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 551-575.
    4. Beuchert, Louise Voldby & Humlum, Maria Knoth & Vejlin, Rune, 2016. "The length of maternity leave and family health," Labour Economics, Elsevier, vol. 43(C), pages 55-71.
    5. Michael Baker & Kevin Milligan, 2010. "Evidence from Maternity Leave Expansions of the Impact of Maternal Care on Early Child Development," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
    6. Christian Dustmann & Uta Schönberg, 2012. "Expansions in Maternity Leave Coverage and Children's Long-Term Outcomes," American Economic Journal: Applied Economics, American Economic Association, vol. 4(3), pages 190-224, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Maternity leave; employee absence; coworkers;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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