Maternity Leave and Paternity Leave: Evidence on the Economic Impact of Legislative Changes in High-Income Countries

Abstract

Labor market policies for expecting and new mothers emerged at the turn of the 19th century. The main motivation for these policies was to ensure the health of mothers and their newborn children. With increased female labor market participation, the focus has gradually shifted to the effects that parental leave policies have on women’s labor market outcomes and gender equality. Proponents of extending parental leave rights for mothers in terms of duration, benefits, and job protection have argued that this will support mothers’ labor market attachment and allow them to take time off from work after childbirth and then safely return to their pre-birth jobs. Others have noted that extended maternity leave can work as a double-edged sword for mothers: If young women are likely to spend months, or even years, on leave, employers are likely to take that into consideration when hiring and promoting their employees. These policies may therefore end up adversely affecting women’s labor market outcomes. This has led to an increased focus on activating fathers to take parental leave, and in 2019, the European Parliament approved a directive requiring member states to ensure at least 2 months of earmarked paternity leave. The literature on parental leave has proliferated during the past two decades. The increased number of studies on the topic has brought forth some consistent findings. First, the introduction of short maternity leave is beneficial for both maternal and child health and for mothers’ labor market outcomes. Second, there appear to be negligible benefits from a leave extending beyond 6 months in terms of health outcomes and children’s long-term outcomes. Furthermore, longer leaves have little, or even adverse, influence on mothers’ labor market outcomes. However, evidence suggests that there may be underlying heterogeneous effects from extended leave among different socioeconomic groups. The literature on the effect of earmarked paternity leave indicates that these policies are effective in increasing fathers’ leave-taking and involvement in child care. However, the evidence on the influence of paternity leave on gender equality in the labor market remains scarce and is somewhat mixed. Finally, recent studies that focus on the effect of parental leave policies for firms find that in general, firms are able to compensate for lost labor when their employees go on leave. However, if firms face constraints when replacing employees, it could negatively influence their performance.

Give Twice to Get the Same: Gender Impact on Leaders’ Orientations and Career Paths

“…Women who decide to reduce or stop work due to motherhood are more dissatisfied with their careers than men in the long term (De Vos et al, 2018). As a result of public parenting programs (Canaan et al, 2022), men tend to play a more significant role in family (Blum et al, 2018; Petts et al, 2020). American fathers spend three times more time caring for their children than their fathers, although they still spend much less time than their children’s mothers (Bianchi et al, 2012; McGill, 2014).…”

“…Gender equality has become challenging for organizations and their leaders, whether women or men (Canaan et al, 2022). In Western countries, the participation of women in the labor market and in leadership positions has increased significantly (Hérault & Kalb, 2020); however, career progression is still conditioned by gender (Bilan et al, 2020).…”

How Maternity Leave Affects Female Employment in the UK?

“…Moreover, when women leave the labour market, their employment opportunities decrease with the time they have been out of work (Schönberg & Ludsteck 2014), which makes it more difficult for them to re-enter the labour market (Manchester, Leslie and Kramer, 2013; Keck & Saraceno 2013). Meanwhile, ML with longer duration (longer than six months) may have a negative impact on the rate at which mothers return to work (Del Boca et al, 2008;Olivetti & Petrongolo, 2017;Canaan et al, 2022), as longer leave duration increases labour costs for women. Specifically, the increase in labour costs refers to the fact that when an employee is pregnant, employers must hire replacement workers to keep the job running during the leave period (UK Government, 2020), and the extended leave means that the position remains vacant for a longer period of time.…”

Paternity leave: first results of introduction in Moldova

“…The influence of paternity leave on reducing the gender gap in labor market participation, i.e. a more equal division of specific household tasks, is another widely researched topic (Canaan, Lassen, Rosenbaum, Steingrimsdottir, 2022). Paternity leave policies reduce the gap between mothers' and fathers' participation in the labor market.…”

“…Also, fathers' low intentions to have more children may stem from their increased awareness of the costs of raising children and the change in preferences as to the number of children in favor of child quality (Farré, González, 2019). Evaluating the introduction and extension of paternity leave in Norway, Cools (2015) and Hart (2019) found no effect on fertility (Canaan, et al, 2022).…”