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Direct and Cross Effects of Employment Protection: The Case of Parental Childcare

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  • Martin Olsson

Abstract

I examine whether employment protection affects the willingness of working parents to provide childcare. Using a reform that made it easier for employers to dismiss workers in small firms, I find that softer employment protection reduces the use of temporary parental leave among directly treated fathers. In addition, I find that households respond to an increase in the dismissal risk by reducing temporary parental leave for the indirectly treated spouse. Spousal labor supply can thus serve as informal insurance against adverse income shocks.

Suggested Citation

  • Martin Olsson, 2017. "Direct and Cross Effects of Employment Protection: The Case of Parental Childcare," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(4), pages 1105-1128, October.
    • Handle: RePEc:bla:scandj:v:119:y:2017:i:4:p:1105-1128
    DOI: 10.1111/sjoe.12193
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    Cited by:

    1. Paula E. Gobbi & Juliane Parys & Gregor Schwerhoff, 2018. "Intra‐household allocation of parental leave," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 51(1), pages 236-274, February.
    2. Bjuggren, Carl Magnus, 2018. "Employment protection and labor productivity," Journal of Public Economics, Elsevier, vol. 157(C), pages 138-157.
    3. Rita Ginja & Jenny Jans & Arizo Karimi, 2020. "Parental Leave Benefits, Household Labor Supply, and Children’s Long-Run Outcomes," Journal of Labor Economics, University of Chicago Press, vol. 38(1), pages 261-320.
    4. Bjuggren, Carl Magnus & Skedinger, Per, 2018. "Does Job Security Hamper Employment Prospects?," Working Paper Series 1255, Research Institute of Industrial Economics.
    5. Pierre Cahuc & Pauline Carry & Franck Malherbet & Pedro S. Martins, 2023. "Spillover effects of employment protection," Nova SBE Working Paper Series wp655, Universidade Nova de Lisboa, Nova School of Business and Economics.

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