Return to work after childbirth: does parental leave matter in Europe?

The aim of this paper is to investigate the role of the extended parental leave in the return to work for mothers of newborn children. Parental leaves have been introduced in the last 30 years in all European countries in order to extend the period of job-protection, allowing both parents to care for the child after the maternity leave period has expired. In this paper, I exploit the variability in policies offered by the EU countries, in terms of length of the leave and payments, and I study the influence of statutory leaves on the probability of staying at home with the child during the leave, and on the probability of working in the period of time following the leave. Using data from ECHP, I select women who have a child in the years of the survey, who have worked before, and I follow them over time. After studying the determinants of the return to work in each country separately, I generalize the results, matching women with similar human capital characteristics and fertility history from different countries and, consequently, under different parental leave regulations. Results suggest that the right to long and paid leaves gives mothers the opportunity to remain at home with the child at a lower cost, and that lengthy statutory leaves are associated with being more likely to be at work in the period following the leave.