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Employer Responses to Family Leave Programs

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Abstract

Search frictions make worker turnover costly to firms. A three-month parental leave expansion in Sweden provides exogenous variation that we use to quantify firms’ adjustment costs upon worker absence and exit. The reform increased women’s leave duration and likelihood of separating from pre-birth employers. Firms with greater exposure to the reform hired additional workers and increased incumbent hours, incurring additional wage costs. These adjustment costs varied by firms’ availability of internal and external substitutes. Economy-wide analyses show that a higher reform exposure is correlated with fewer hires and lower starting wages of young women compared to men and older women.

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  • Ginja, Rita & Karimi, Arizo & Xiao, Pengpeng, 2020. "Employer Responses to Family Leave Programs," Working Papers in Economics 6/20, University of Bergen, Department of Economics.
  • Handle: RePEc:hhs:bergec:2020_006
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    Cited by:

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    2. Peter Blair & Benjamin Posmanick, 2023. "Why Did Gender Wage Convergence in the United States Stall?," Working Papers 2023-001, Human Capital and Economic Opportunity Working Group.
    3. Del Rey, Elena & Racionero, Maria & Silva, Jose I., 2024. "Employer vs government parental leave: Labour market effects," Economic Modelling, Elsevier, vol. 136(C).
    4. Jones, Kelly & Wilcher, Britni, 2024. "Reducing maternal labor market detachment: A role for paid family leave," Labour Economics, Elsevier, vol. 87(C).
    5. Machado, Cecilia & Neto, Valdemar & Szerman, Christiane, 2023. "Firm and Worker Responses to Extensions in Paid Maternity Leave," IZA Discussion Papers 16555, Institute of Labor Economics (IZA).
    6. Schmutte, Ian M. & Skira, Meghan M., 2020. "The Response of Firms to Maternity Leave and Sickness Absence," GLO Discussion Paper Series 691, Global Labor Organization (GLO).
    7. Bamieh, Omar & Ziegler, Lennart, 2023. "Gender-age differences in hiring rates and prospective wages—Evidence from job referrals to unemployed workers," Labour Economics, Elsevier, vol. 83(C).
    8. Ilaria D'Angelis, 2023. "The Search for Parental Leave and the Early-Career Gender Wage Gap," Working Papers 2023-01, University of Massachusetts Boston, Economics Department.
    9. Albanesi, Stefania & Olivetti, Claudia & Petrongolo, Barbara, 2022. "Families, labor markets and policy," LSE Research Online Documents on Economics 118038, London School of Economics and Political Science, LSE Library.
    10. Freiberg Tracey, 2023. "Families first: A comparative study of company responses to paid care leave programs in the COVID-19 pandemic," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 13(1), pages 1-47, January.
    11. Huebener, Mathias & Jessen, Jonas & Kühnle, Daniel & Oberfichtner, Michael, 2021. "A Firm-Side Perspective on Parental Leave," IZA Discussion Papers 14478, Institute of Labor Economics (IZA).
    12. Kai Fischer, 2023. "Skilled Labour Migration and Firm Performance: Evidence from English Hospitals and Brexit," CESifo Working Paper Series 10747, CESifo.
    13. Bartel, Ann P. & Rossin-Slater, Maya & Ruhm, Christopher J. & Slopen, Meredith & Waldfogel, Jane, 2021. "The Impact of Paid Family Leave on Employers: Evidence from New York," IZA Discussion Papers 14262, Institute of Labor Economics (IZA).
    14. Bana, Sarah & Bedard, Kelly & Rossin-Slater, Maya & Stearns, Jenna, 2023. "Unequal use of social insurance benefits: The role of employers," Journal of Econometrics, Elsevier, vol. 233(2), pages 633-660.
    15. Alena Bičáková & Klára Kalíšková, 2024. "Is longer maternal care always beneficial? The impact of a 4-year paid parental leave," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(2), pages 1-45, June.
    16. Timpe, Brenden, 2024. "The labor market impacts of America’s first paid maternity leave policy," Journal of Public Economics, Elsevier, vol. 231(C).
    17. Huber, Katrin & Rolvering, Geske, 2023. "Public Child Care and Mothers' Career Trajectories," IZA Discussion Papers 16433, Institute of Labor Economics (IZA).
    18. Rettl, Daniel A. & Schandlbauer, Alexander & Trandafir, Mircea, 2022. "Employee Health and Firm Performance," IZA Discussion Papers 15147, Institute of Labor Economics (IZA).
    19. Cecilia Machado & Valdemar Neto & Christiane Szerman, 2023. "Firm and Worker Responses to Extensions in Paid Maternity Leave," CESifo Working Paper Series 10736, CESifo.
    20. Francesca Carta & Alessandra Casarico & Marta De Philippis & Salvatore Lattanzio, 2024. "Mom's out: employment after childbirth and firm-level responses," Temi di discussione (Economic working papers) 1458, Bank of Italy, Economic Research and International Relations Area.
    21. Canaan, Serena & Lassen, Anne Sophie & Rosenbaum, Philip & Steingrimsdottir, Herdis, 2022. "Maternity Leave and Paternity Leave: Evidence on the Economic Impact of Legislative Changes in High Income Countries," IZA Discussion Papers 15129, Institute of Labor Economics (IZA).
    22. Kristin F. Butcher & Deniz Çivril & Sari Pekkala Kerr, 2024. "The Impact of State Paid Leave Laws on Firms and Establishments: Evidence from the First Three States," Working Paper Series WP 2024-12, Federal Reserve Bank of Chicago.
    23. Healy, Olivia & Heissel, Jennifer A., 2024. "Baby Bumps in the Road: The Impact of Parenthood on Job Performance, Human Capital, and Career Advancement," IZA Discussion Papers 16743, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Parental Leave; Firm-Specific Human Capital; Statistical Discrimination;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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